Fed: Governor Adriana Kugler was absent, did not vote

Fed: Governor Adriana Kugler was absent, did not vote

The Federal Reserve (Fed) held its benchmark interest rates steady on Wednesday, maintaining the range of 4.25% to 4.50%, despite repeated pressure from President Donald Trump to cut rates. The decision came with two dissenting votes from Fed governors, a rarity in the institution's history.

The Fed's Federal Open Market Committee (FOMC) voted 9-2 to keep the rates unchanged, with Governor Adriana Kugler absent and not voting. The policy statement highlighted that the unemployment rate remains low, and labor market conditions are solid, while inflation is somewhat elevated. The committee noted that economic growth moderated in the first half of the year, but uncertainty about the economic outlook remains elevated, with risks to both inflation and employment goals [1].

The dissenting votes were cast by Vice Chair for Supervision Michelle Bowman and Governor Christopher Waller, both Trump appointees who have advocated for lowering interest rates. Their votes marked the first time in over 30 years that two members of the Fed's seven-person Washington-based Board of Governors voted against a rate decision at the consensus-driven central bank [1].

Powell, a bipartisan figure appointed by former President Barack Obama and later promoted by Trump, voted to hold rates steady, as did three other governors and the five Fed regional bank presidents. The regional bank presidents are hired by local boards of directors overseeing the Fed's 12 regional institutions [1].

The Fed's decision to hold rates steady was met with a slight increase in Treasury yields and a modest drop in stock prices. Futures markets increased the odds of a rate cut at the September meeting. The data since the June meeting has given policymakers little reason to shift from their "wait-and-see" approach, as the unemployment rate remains low at 4.1%, and recent inflation data shows faster increases for some heavily imported goods [1].

Trump has publicly criticized Powell for not cutting rates to lower the government's borrowing costs, a concern outside the Fed's congressional mandate to maintain stable inflation and maximum employment [1].

References:
[1] https://www.reuters.com/business/fed-holds-rates-steady-despite-trumps-pressure-with-two-governors-dissenting-2025-07-30/
[2] https://www.reuters.com/business/fed-leaves-rates-unchanged-despite-trumps-pressure-with-two-governors-dissenting-2025-07-30/
[3] https://www.forbes.com/sites/tylerroush/2025/07/30/fed-decides-against-interest-rate-cut-but-powell-faces-first-double-dissent-in-decades/