Fed expected to hold rates steady, but 2 officials might dissent

Yahoo

29-07-2025

The Federal Reserve kicks off its July meeting on Tuesday, with Fed Chair Jerome Powell set to speak on Wednesday and deliver the central bank's latest interest rate decision.
Markets are largely expecting the Fed to hold rates steady, but Yahoo Finance Senior Fed Reporter Jennifer Schonberger outlines what she's watching for during this meeting, including potential disagreement among Fed officials.
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
Obviously, Jen, the Fed is under a microscope right now, but as uh many, many Fed watchers have been reminding us on this program, the Fed is not one person, right? The Fed is a whole committee. And so, what could that sort of look like the debate within the room? Not that we're going to know that today necessarily, um, the the sort of color of it, but still, what can we expect?
Yeah, lots to pick apart there, Julie. As you said, the Fed widely expected to hold rate steady Wednesday afternoon as the majority of the committee uh favors a wait and see mode to see if tariffs are indeed impacting inflation as we go through the summer months, likely to spark further ire from the president who's been hammering the central bank. But I am watching closely to see if we see two dissents from two different Federal Reserve governors. Those are Chris Waller and Michelle Bowman. Ahead of this meeting, Waller clearly said he was in favor of cutting rates. He thinks that any inflation that we we we would see from tariffs would be a one-time increase in pricing, and that would be something that the Fed could look through. He's also concerned that private sector job growth is stalling. Now, Bowman on the other hand had mentioned in June that inflation has come in benign and if it continues to come in benign that she would support a rate cut. Uh the last inflation report, maybe a bit of a gray area there, as we are starting to see some tariffs come through on the good side of the equation. The service is looking okay right now, though Bowman also saying she's more concerned about the employment side of the dual mandate. If we were to see do two dissents from these two Fed governors tomorrow, Julie, that would mark the first time since December 1993.
Wow. So, not common to say the least. Just just quickly, Jen, there had been a lawsuit that was trying to force live streaming of the Fed meeting. What happened with that? Wow.
Right. Well, uh hedge fund Azoria, which is run by James Fishback, uh who was close to the White House had sued the white had sued the Federal Reserve, rather, under the grounds that it was violating the Sunshine Act of 1976. Under that act, basically says that all federal agencies need to keep their meetings open. During an emergency hearing yesterday in federal court here in Washington, the judge denied that, saying that the Fed is not technically or the FOMC is not technically an agency. It's part of a larger Federal Reserve system. And so, the Sunshine Act doesn't apply here. Though, this is probably not the last we are going to hear from Fishback and his hedge fund Azoria on this issue. He says that the Fed is trying to skirt this by essentially having a joint meeting between the Federal Reserve Board of Governors and the FOMC. So we will see how this continues to play out in the court system. But today, we will see another closed-door meeting. It will not be live.
Right. As is typical. Yes. Brooke Josh, Jennifer, thank you so much.