Federal Reserve Chair Jerome Powell held firm on monetary policy, calling the central bank’s current stance “modestly restrictive” and reiterating that no decision has been made about a rate cut in September.
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On Wednesday, the Federal Reserve held interest rates steady at 4.25%-4.50% as expected, yet two members broke ranks to support a rate cut, marking the most divided Fed meeting in over three decades.
Powell Doesn’t Concede On September Rate Cut
Speaking after the July Federal Open Market Committee meeting, Powell said inflation remains “a bit above 2%,” even when excluding the recent tariff-driven spike in goods prices.
Despite softening in some economic indicators, Powell emphasized that policy must remain tight enough to prevent those price increases from becoming embedded.
Markets and the Trump administration have been pressuring the Fed to begin cutting interest rates this fall. But Powell resisted those calls, stressing that two more rounds of jobs and inflation data will arrive before the next meeting.
“We have made no decisions about September,” he said. “We don’t do that in advance.”
Powell explained that the Fed is trying to time its next move efficiently: “If we move too soon, we may not finish the job on inflation. If we move too late, we risk unnecessary damage to the …