Fed Holds Rates Steady Amid Double Dissent for 25-Point Cut

The Federal Reserve’s July 2025 policy meeting revealed growing internal divisions, as two prominent officials—Governors Christopher Waller and Michelle Bowman—dissented in favor of a rate cut. While the central bank ultimately decided to hold its key interest rate steady within the range of 4.25% to 4.50%, the dissent marked a significant shift in the stance of some policymakers who had previously supported tighter monetary conditions [1]. Both Waller and Bowman publicly advocated for a 25-basis-point reduction, signaling concerns over the economic outlook and the potential for inflation to moderate more quickly than anticipated [2].

Bowman’s position was particularly notable given her prior advocacy for maintaining elevated rates, highlighting a potential shift in the Federal Open Market Committee’s (FOMC) strategy [3]. Waller, a key voice within the Fed, also emphasized that inflation trends supported a move toward easing, adding weight to the argument for a cut [4]. Their dissent comes amid mounting pressure from President Donald Trump, who has repeatedly called for aggressive rate reductions to stimulate economic growth and improve his re-election prospects [5].

The decision to maintain rates underscored the Fed’s cautious approach, balancing the risks of inflation persistence with the signs of a slowing economy. Analysts, including JPMorgan’s Michael Feroli, have pointed to the growing divergence in the FOMC’s thinking, suggesting that the central bank could face its first double dissent in decades [6]. Despite Trump’s public demands, the Fed has largely resisted calls to pivot toward aggressive easing, instead opting for a more measured response to evolving economic conditions.

The implications of the dissent remain to be seen, but the event highlights the increasing complexity of the Fed’s policymaking environment. With inflation still above target and economic growth showing signs of fragility, the debate over the appropriate path for interest rates is likely to continue. The FOMC’s ability to maintain consensus amid diverging views will be a critical factor in shaping the trajectory of U.S. monetary policy in the coming months [7].

Source: [1] [https://apnews.com/article/federal-reserve-powell-trump-rates-99d90bab1ba2faa0fc5d4a6106125da7](https://apnews.com/article/federal-reserve-powell-trump-rates-99d90bab1ba2faa0fc5d4a6106125da7)

[2] [https://www.wsj.com/economy/central-banking/fed-holds-rates-steady-but-two-officials-back-a-cut-6fc17c67?gaa_at=eafs&gaa_n=ASWzDAjSLL63WTiTSa7CRb4in-t5AWOTP1eNghZZzfE_JWjySPnRcmSmEZGa&gaa_sig=l1te8MtBB6lbBGMtfX8BmQcH5j_8S800HcyqsBRaRomQ4_wFlHzhgP9FylX9Oaduv91jDbwZrHZ2z_x8SWw7Yw%3D%3D&gaa_ts=688a6301](https://www.wsj.com/economy/central-banking/fed-holds-rates-steady-but-two-officials-back-a-cut-6fc17c67?gaa_at=eafs&gaa_n=ASWzDAjSLL63WTiTSa7CRb4in-t5AWOTP1eNghZZzfE_JWjySPnRcmSmEZGa&gaa_sig=l1te8MtBB6lbBGMtfX8BmQcH5j_8S800HcyqsBRaRomQ4_wFlHzhgP9FylX9Oaduv91jDbwZrHZ2z_x8SWw7Yw%3D%3D&gaa_ts=688a6301)

[3] [https://www.streetinsider.com/Economic+Data/Fed+Governors+Waller%2C+Bowman+Dissented+In+Favor+Of+Rate+Cut/25120955.html](https://www.streetinsider.com/Economic+Data/Fed+Governors+Waller%2C+Bowman+Dissented+In+Favor+Of+Rate+Cut/25120955.html)

[4] [https://www.reuters.com/business/fed-likely-hold-rates-steady-despite-trumps-push-big-cuts-2025-07-30/](https://www.reuters.com/business/fed-likely-hold-rates-steady-despite-trumps-push-big-cuts-2025-07-30/)

[5] [https://www.wsj.com/economy/central-banking/fed-interest-rates-dissent-powell-trump-83f4f49e?gaa_at=eafs&gaa_n=ASWzDAhno2_xnOoIiWMGLsnkbHOp_SWg2EZJ055gbvVQ0G77fVlgwwO0R2UC&gaa_sig=cWqKWexZrNwSx3-ia0qCZH0MfNetSeZgmxXnYPgr7UGJSGYko0hD4rgBIu7UEVzq7qa3Lwcpjed8aImk8sbgew%3D%3D&gaa_ts=688a6301](https://www.wsj.com/economy/central-banking/fed-interest-rates-dissent-powell-trump-83f4f49e?gaa_at=eafs&gaa_n=ASWzDAhno2_xnOoIiWMGLsnkbHOp_SWg2EZJ055gbvVQ0G77fVlgwwO0R2UC&gaa_sig=cWqKWexZrNwSx3-ia0qCZH0MfNetSeZgmxXnYPgr7UGJSGYko0hD4rgBIu7UEVzq7qa3Lwcpjed8aImk8sbgew%3D%3D&gaa_ts=688a6301)

[6] [https://finance.yahoo.com/news/a-divided-fed-is-expected-to-hold-rates-steady-defying-trumps-calls-for-a-cut-100041741.html](https://finance.yahoo.com/news/a-divided-fed-is-expected-to-hold-rates-steady-defying-trumps-calls-for-a-cut-100041741.html)

[7] [https://www.cnn.com/business/live-news/federal-reserve-interest-rate-07-30-25](https://www.cnn.com/business/live-news/federal-reserve-interest-rate-07-30-25)