Fed Holds Rates Steady at 4.25%-4.5% Amid Mixed Economic Signals

Federal Reserve Chair Jerome Powell has reaffirmed the central bank’s decision to maintain interest rates in the 4.25% to 4.5% range for the fifth consecutive meeting, with no indication of a rate cut in September despite ongoing pressure from President Donald Trump and market speculation [1]. The Federal Open Market Committee (FOMC) reached this decision during its July 30 policy meeting, underscoring a cautious approach amid evolving economic data and mixed internal discussions [2].

In his press conference, Powell emphasized that the Fed has not made any decisions regarding the September meeting and reiterated the importance of allowing current policy to take full effect before considering further action. His remarks reflect a broader divide within the Fed, with some members advocating for easing monetary policy and others holding firm due to recent economic indicators such as firmer core inflation and continued job growth [3].

The odds of a rate cut at the September meeting have declined from 66% to 60% following the latest economic data, yet the Fed has not provided any clear signals or forward guidance about future moves [4]. This lack of clarity has led to continued speculation, with the FedWatch Tool estimating a 63.7% probability of a 25 basis point cut in September [5]. However, Powell has maintained a non-committal stance to avoid influencing market expectations.

President Trump has repeatedly urged the Fed to lower interest rates to boost economic growth, but Powell has consistently resisted political pressure, reiterating the Fed’s commitment to data-driven policymaking. The decision to hold rates steady signals a preference for patience and prudence, aligning with broader inflation expectations and price stability goals [6].

Analysts suggest the Fed is not ruling out rate cuts in the near future but is prioritizing economic stability and inflation control. The absence of forward guidance further indicates the central bank’s desire for more clarity before committing to an easing cycle. With the next policy meeting scheduled for September 16-17, market participants will closely monitor for any signals of a shift in policy, though the July decision suggests the Fed is not rushing toward rate cuts [7].

The decision to delay rate cuts has had visible effects on financial markets, particularly in the cryptocurrency space, where traders closely follow Federal Reserve announcements. The cryptomarket’s volatility remains closely tied to expectations of Fed policy, with assets like BTC and ETH showing sensitivity to the central bank’s stance [5]. Historical patterns suggest delayed Fed actions can shift risk appetites, with investors potentially reallocating capital toward safer assets [5].

The Fed’s key interest rate has remained unchanged since December 2025, marking the longest period of stability since the rate hikes began earlier in the year. Powell’s firm stance against a September cut reflects both current economic conditions and the need to maintain credibility in inflation expectations, reinforcing the Fed’s commitment to a measured and data-dependent approach [7].

Sources:

[1] CNBC

https://www.cnbc.com/2025/07/30/fed-meeting-live-updates.html

[2] Yahoo Finance

https://finance.yahoo.com/news/divided-fed-holds-rates-steady-again-defying-trump-180230013.html

[3] Investors.com

https://www.investors.com/news/economy/federal-reserve-meeting-fed-chair-powell-gdp-jobs-data-sp-500/

[4] USA Today

https://www.usatoday.com/story/money/2025/07/30/federal-reserve-interest-rate-cuts-live-updates/85430906007/

[5] CoinMarketCap

https://coinmarketcap.com/community/articles/688a6f2aa46b022297b51bcd/

[6] Forbes

https://www.forbes.com/sites/tylerroush/2025/07/30/fed-decides-against-interest-rate-cut-but-powell-faces-first-double-dissent-in-decades/

[7] CBS News

https://www.cbsnews.com/news/federal-reserve-meeting-today-fed-fomc-interest-rate-trump-powell/