The Federal Reserve maintained interest rates steady on Wednesday, bucking pressure from Donald Trump to lower borrowing costs. However, two board members, Christopher Waller and Michelle Bowman, dissented from the decision, arguing that a rate cut was necessary to prevent a worsening labor market.
Waller, a Trump appointee, believes that the president’s tariffs are unlikely to cause significant inflationary pressures. He advocates for easing monetary policy to address what he sees as signs of economic weakness. In contrast, Powell argued that there were “good arguments” in favor of keeping rates steady and acknowledged the unusual situation where both employment and inflation mandates are at risk.
The decision marks a rare instance of dissent from the Fed’s board members, with only seven occurrences since 1993. The central bank had previously signaled a commitment to cutting rates as soon as September, but now plans to wait for further data on the impact of tariffs on prices and the economy.
Source: https://www.politico.com/news/2025/07/30/fed-powell-trump-rates-economy-waller-00484764