Fed Holds Rates Steady Amid Trump Pressure and Double Dissent

The Federal Reserve has once again opted to keep interest rates unchanged amid growing pressure from the Trump administration to reduce borrowing costs. On July 31, 2025, White House Senior Advisor Kevin Hassett publicly supported the idea of potential rate cuts, citing current economic data as justification for such a move [1]. This aligns with broader economic sentiments that the Fed has been slow to respond to shifting conditions, with several economists arguing that a more proactive adjustment to rates is necessary [2].

Despite the administration’s urging, the Federal Open Market Committee (FOMC) decided to maintain the federal funds rate within the 4.25%-4.50% range. Two officials, Christopher Waller and Michelle Bowman, dissented in favor of a rate cut, marking the first time in over three decades that two Fed governors formally opposed the FOMC’s decision [3]. Waller emphasized the economy’s slowing momentum and potential employment risks, while Bowman downplayed concerns about inflation from Trump’s trade policies [4]. The majority of the FOMC, however, has chosen to observe the broader economic impacts of recent policy moves before adjusting rates.

President Trump has remained vocal in his criticism of the Fed, particularly of Chair Jerome Powell. Trump has even hinted at removing Powell from his position, citing concerns about the cost of the Fed’s headquarters renovation [5]. On social media, Trump has reiterated that “No Inflation!” and that high interest rates are “hurting people” who want to buy homes [6]. These statements underscore the administration’s frustration with the Fed’s cautious approach.

Market expectations have shifted in light of the Fed’s decision. While some analysts had predicted a rate cut in July, the first potential reduction is now anticipated as late as October [7]. Investors are closely monitoring the Fed’s next steps, particularly given the uncertainty created by Trump’s ongoing trade policies and their potential inflationary effects. The central bank has acknowledged these risks but has not yet seen enough data to justify a cut.

The Fed’s decision also highlights the tension between the Trump administration and the central bank’s commitment to maintaining independence. Experts have noted that Trump’s aggressive demands for rate cuts are unusual in the context of U.S. presidential influence over monetary policy [8]. The Fed continues to balance its dual mandate of maximum employment and stable prices, navigating a complex economic landscape shaped by Trump’s policies.

The cryptocurrency market, historically sensitive to interest rate decisions, remains on edge. Analysts have pointed to past trends where Fed rate cuts led to increased inflows into crypto assets, particularly in 2019 and 2020 [7]. Bitcoin (BTC), which currently trades at $117,731.68, has seen a 21.59% price increase over the past 90 days and maintains a 60.77% dominance in the market. Recent trading volume, however, has slightly declined to $63 billion [1].

As the Fed continues to assess macroeconomic signals, the path forward remains uncertain. The White House’s persistent push for rate cuts contrasts with the Fed’s measured approach, creating a dynamic that will likely shape both financial and political discourse in the coming months.

Sources:

[1] Fox, [https://www.foxbusiness.com/politics/fed-meeting-looms-trump-celebrates-3-gdp-growth-pushes-rate-cuts](https://www.foxbusiness.com/politics/fed-meeting-looms-trump-celebrates-3-gdp-growth-pushes-rate-cuts)

[2] The, [https://www.wsj.com/economy/central-banking/fed-holds-rates-steady-but-two-officials-back-a-cut-6fc17c67?gaa_at=eafs&gaa_n=ASWzDAhs_VJggWCPezyvN8E5kJl6Y3BajZI7ljOzp-4oiHiM-FGEMScAPHH8&gaa_sig=yHShrjsJwUcfe0ebPL3tQbHvIocdubWChjTpC3SwHSbq18OwZlgHmMVrgkNqrgaUMnk7OoKlRB4eVeXQVLbGyg%3D%3D&gaa_ts=688a6460](https://www.wsj.com/economy/central-banking/fed-holds-rates-steady-but-two-officials-back-a-cut-6fc17c67?gaa_at=eafs&gaa_n=ASWzDAhs_VJggWCPezyvN8E5kJl6Y3BajZI7ljOzp-4oiHiM-FGEMScAPHH8&gaa_sig=yHShrjsJwUcfe0ebPL3tQbHvIocdubWChjTpC3SwHSbq18OwZlgHmMVrgkNqrgaUMnk7OoKlRB4eVeXQVLbGyg%3D%3D&gaa_ts=688a6460)

[3] Fidelity, [https://www.fidelity.com/news/article/top-news/202507300605RTRSNEWSCOMBINED_KBN3JL12R-OUSBS_1](https://www.fidelity.com/news/article/top-news/202507300605RTRSNEWSCOMBINED_KBN3JL12R-OUSBS_1)

[4] Fox, [https://www.foxbusiness.com/economy/powell-fed-cut-rates-response-trumps-pressure](https://www.foxbusiness.com/economy/powell-fed-cut-rates-response-trumps-pressure)

[5] The, [https://www.telegraph.co.uk/business/2025/07/30/us-economy-surges-in-boost-for-trump/](https://www.telegraph.co.uk/business/2025/07/30/us-economy-surges-in-boost-for-trump/)

[6] Kansas, [https://kansaspublicradio.org/npr-news/2025-07-30/trump-keeps-pressuring-the-fed-to-cut-rates-heres-why-its-independence-matters](https://kansaspublicradio.org/npr-news/2025-07-30/trump-keeps-pressuring-the-fed-to-cut-rates-heres-why-its-independence-matters)

[7] Forbes, [https://www.forbes.com/sites/tylerroush/2025/07/30/fed-likely-wont-cut-interest-rates-today-as-powell-may-face-first-double-dissent-in-decades/](https://www.forbes.com/sites/tylerroush/2025/07/30/fed-likely-wont-cut-interest-rates-today-as-powell-may-face-first-double-dissent-in-decades/)

[8] The, [https://www.nytimes.com/2025/07/29/business/powell-trump-fed-rate-cuts.html](https://www.nytimes.com/2025/07/29/business/powell-trump-fed-rate-cuts.html)