The Federal Reserve is expected to stabilize key interest rates after the two-day meeting concludes on July 30th.
Powell fixes Trump with Fed renovation costs
President Donald Trump cited the costs of reforming the Federal Reserve during his rare visit, urging Chairman Jerome Powell to push him back.
The Federal Reserve is not expected to announce lower interest rates after the July 30 meeting, but all eyes are listed in a statement after the central bank to see if there are any indications of impending cuts in September.
The Fed has been stabilizing key interest rates since late 2024, despite months of pressure being put on by President Donald Trump to cut back on the pressure. Trump had the idea of firing Fed Chairman Jerome Powell, but on July 24, the president retreated his threat after visiting the Fed headquarters.
Trump’s anger stems from the central bank’s decision to wait and see how tariffs affect prices before adjusting fees. After the Fed’s June meeting, Powell told reporters that as long as the economy maintains a solid labor market, decent growth and soft inflation, “We feel that what’s right is where we are, where our policy stance is, and where we learn more.”
Still, Trump updated his demands after the release of the July 30 GDP report, which showed that the US economy had risen 3% in the second quarter. In a post about the truth social, he said Powell “now needs to lower the rate ‘now’.
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On July 30, Treasury Secretary Scott Bescent suggested that the Fed overestimated the impact of tariffs on inflation.
According to the Ministry of Labor, prices rose 2.7% in the 12 months from June to June, the highest annual inflation rate since February. Some data are seen as a sign that Trump’s tariffs are beginning to reach consumer prices. Apparel costs rise by 0.4%, furniture prices rise by 1%, and toys rise by 1.8%.
However, Bessent argued that tariffs should be considered a one-off price adjustment rather than inflation, suggesting that accelerated June inflation could be a “rounding error” due to dollar depreciation.
Bessent doesn’t expect interest rate cuts in July, but he said he hopes the Fed leadership will have a “a bit of imagination” about the impact of tariffs on a moving forward economy.
“They’ll think they’re wrong about tariff inflation,” he added at an event hosted by Breitbart News that “the lack of open mindedness that has frozen the Fed.”
The impact of tariffs on pricing has been mild so far, but economists are hoping for more price increases as businesses pass at least some tariff costs to consumers, primarily as retailers stockpiled goods before new fees came into effect.
-Baily Schultz
Bessent said there is still an opportunity for countries to negotiate a new trade agreement with the United States after the August 1 tariff deadline.
Trump pointed out August 1, and was enacted as a marker of higher tariffs on goods from nearly 180 countries around the world. However, Bessent spoke on July 30 at a policy event hosted by Breitbart, saying the deadline would not close negotiations.
“If there is no transaction by August 1st, I would encourage market participants, corporate America, and even countries to avoid panic because you can still trade,” Bescent said. “We’ll just go back to the mutual tariff levels on April 2nd.”
The sudden “mutual” tariffs Trump originally imposed on April 2 — but shortly after a 90-day suspension amid a market turbulence — was due to return on July 9.
Since April, the Trump administration has imposed a universal tariff of 10% on nearly 180 countries.
– Joey Garrison
Bescent was also pushed back by Trump’s tariff critics who warned inflation would skyrocket in his remarks. Fed Chairman Jerome Powell has kept interest rates down despite Trump’s demands due to inflation concerns from tariffs.
“We have moved from Trump Shrinkage syndrome to Tariff Strike syndrome,” Bescent said.
Despite Bessent’s rating, the Labor Bureau said inflation accelerated in June, with prices rising 2.7% over the past 12 months. It marked the highest annual inflation rate since February.
– Joey Garrison
The Fed began raising interest rates in 2022 amid rapid inflation, rising from near zero in July 2023 to 5.25% from a two-year high to 5.5%.
The Fed slowed its speed reduction amid stubborn inflation and strong economic growth, but in 2024, fees began to ease as inflation softened.
– Bailey Schultz
US stocks were mostly open high, but Dow Jones Industrial Average shook a bit as investors focused on a massive flood of technology revenue. The S&P 500 rose 5 points, trading at nearly 6,376 early trading, while the Dow was essentially flat near 44,630. The NASDAQ composite, which consists of many of the high-tech Titans, jumped 48 points (0.2%) to nearly 21,146. Meta, Microsoft and Qualcomm will report quarterly results after the closure bell.
– Andrea Raikier
Future Federal Reserve meetings include:
- September 16th-17th
- October 28th-29th
- December 9th-10th
– Bailey Schultz
According to CME’s FedWatch, there is about a 3% chance that the Fed will announce interest rate cuts in July. This is a tool to measure the expectations of interest traders.
According to FedWatch, the rate cut in September is likely to be at an odds of almost 60%. Investors expect the two rates to decline by the end of the year.
– Bailey Schultz
According to CME’s FedWatch, this is what the interest rates consider to be in the range of the Fed rates after the next five policy setting meetings, and after the next five policy setting meetings. The numbers are accurate as of 5pm on July 29th.
– Jim Sergent
The Fed adjusts interest rates to support the dual mission of stabilizing prices and keeping employment high.
If inflation is high, the Fed can raise interest rates and make borrowing more expensive and cooler economic activity. If unemployment rates are high, reductions can drive economic growth and employment.
– Bailey Schultz
Employers added a solid 147,000 jobs in June, but profits have been focused on healthcare, state and local government, as well as leisure and hospitality over the last few months. Forecasters surveyed by Bloomberg predict that the US will add 109,000 jobs in July.
– Bailey Schultz, Paul Davidson
The economy grew 3% robust in the second quarter, mainly due to a sharp decline in imports following the tariff-related import surge in the first quarter. Economists surveyed by Bloomberg predicted a 2.4% increase.
Forecasters expect the economy to slow down in the coming months as Trump’s tariffs rekindle inflation and SAP consumer purchasing power. According to an economist surveyed by the Wolters Kluwer Blue Chip Economic Indicator, growth is projected to be below 1% in the third and fourth quarters.
– Bailey Schultz, Paul Davidson
The Fed has refrained from cutting rates so far this year as tariffs promote economic uncertainty and increase the risk of inflation.
Previous tariffs had little impact on inflation. This is because businesses stocked imports before higher rates came into effect, but there are signs that China-made products became more expensive in June. Still, many economists say the effects were mild.
– Bailey Schultz, Paul Davidson
Trump reaffirmed on July 30 that he would not be extended.
“The first deadline for August is the first deadline for August. It’s strong and will not be extended. It’s a big day for America!!!” Trump wrote in his morning post on the truthful social of his social media app.
In recent weeks, Trump has written to leaders of several countries warning about new tariff rates on the country’s products that will take effect on August 1. His administration also announced trade deals with the UK, Vietnam, Indonesia and the European Union. On July 30, Trump said he plans to impose a 25% tariff on imports from India and collect a “penalty” from the country to purchase military equipment and energy from Russia.
Trump has taken an on-off approach to his tariff regime, routinely threatening new fees for items he retreats from later on. His past efforts have earned him the nickname among Wall Street financial analysts called “Taco Trade.”
But Trump has insisted he will not be upset since August 1st.
– Joey Garrison
US stock futures rose high before the market opened on July 30th as investors await a massive amount of economic data and corporate profits. The market will obtain information on US GDP, pending home sales and private salaries before the Fed announces its decision early in the afternoon. After the closure bell, tech heavyweights like Meta and Microsoft share quarterly results.
Finally, futures linked to the S&P 500 increased by nearly 6,415 0.1%, while the Dow Jones industrial average was barely changed at around 44,836. Nasdaq futures earned around 60 points (0.3%), trading at nearly 23,512. In 2010, the Ministry of Finance slid 9 basis points to approximately 4.33%.
– Andrea Raikier
The Federal Reserve holds eight regular scheduled meetings each year to determine monetary policy.
This month’s meeting will be held from July 29th to July 30th, with the Fed announcing its interest rate decision at 2pm on July 30th, followed by a press conference with Powell.
– Bailey Schultz
The benchmark federal funding rate has not changed from 4.25% to 4.5% since December, when the Fed announced a quarter-point decline.
– Bailey Schultz
