Federal Reserve Holds Rates, Cites Economic Uncertainty

The Chairman of the Federal Reserve has stated that no decisions have been made regarding the September interest rate. During a press conference following the latest monetary policy meeting, the Chairman emphasized that the Federal Reserve will consider relevant economic information before the next policy meeting. The federal funds rate target range has been maintained at 4.25% to 4.50%, marking the fifth consecutive meeting where the rate has remained unchanged.

The Federal Reserve's policy statement noted that the U.S. economy has shown signs of slowing growth in the first half of the year, which could provide a basis for future rate cuts. However, the statement also highlighted the high level of uncertainty in the economic outlook, with both inflation and employment targets facing risks. This cautious stance reflects the Federal Reserve's reluctance to lower rates until the paths of inflation and employment become clearer.

Notably, this meeting saw two Federal Reserve governors voting against the rate decision, the first time this has happened in over 30 years. This indicates the influence of public pressure from the U.S. President, who has called for rate cuts. The Chairman reiterated that the Federal Reserve will continue to monitor economic data closely and make decisions based on the information available.

The Chairman also noted that while there is uncertainty surrounding the impact of tariffs on inflation, the long-term inflation expectations remain aligned with the 2% target. The Chairman emphasized that the Federal Reserve is committed to achieving maximum employment and restoring inflation to its 2% target. The Chairman also highlighted that the majority of estimates for effective tariff rates have not changed significantly, suggesting that the impact of tariffs on inflation is likely to be temporary.

The Chairman stated that while there is some uncertainty, the economy remains stable. The Chairman also noted that the two governors who voted against the rate decision will provide more information in the coming days. The Chairman did not provide any updates on whether he will continue to serve as a Federal Reserve governor after his term as Chairman ends.