The Fed decided to maintain the target range for the federal funds rate at 4.25% to 4.5%.
The Fed rate decision came at the end of a two-day policy meeting, even as markets remained on edge over Trump’s plans to impose new tariffs on a wide range of imports starting Friday. The Federal Open Market Committee (FOMC) signaled a cautious approach, opting to assess the impact of rising trade tensions before making any policy shifts.
The Fed’s announcement followed early indicators showing that the US economy returned to growth in the second quarter, offering a buffer against concerns over slowing global demand. However, with inflation still hovering below the central bank’s 2% target and price pressures from tariffs expected to build in the coming months, the rate-setting committee remains divided on the path ahead.
Analysts say the Fed’s stance reflects an effort to remain above political noise and stick to its dual mandate of price stability and maximum employment. However, the backdrop of Trump’s criticism and looming trade penalties continues to complicate the Fed’s calculus.
With the next meeting scheduled for September, all eyes will now turn to incoming data on consumer prices, labor markets, and the evolving trade landscape — especially as Trump’s tariff moves threaten to reshape inflation dynamics and global supply chains.