US central bank leaves interest rates unchanged
The Fed's decision on Wednesday leaves its key short-term rate at about 4.3 per cent, where it has stood after the US central bank reduced it three times last year.
Chair Jerome Powell has said the Fed would likely have cut rates already if not for Trump's sweeping tariffs.
Federal Reserve issues #FOMC statement: https://t.co/UkGz3oMKtn— Federal Reserve (@federalreserve) July 30, 2025
Powell and other Fed officials say they want to see how Trump's duties on imports will affect inflation and the broader economy.
So far the duties have lifted costs of some goods such as appliances, furniture and toys and overall inflation has risen slightly although less than many economists had expected.
There were some signs of splits in the Fed's ranks: governors Christopher Waller and Michelle Bowman voted to reduce borrowing costs while nine officials, including Powell, favoured standing pat.
It is the first time in more than three decades that two of the seven Washington DC-based governors have dissented.
One official, governor Adriana Kugler, was absent and did not vote.
The choice to hold off on a rate cut will almost certainly result in further conflict between the Fed and White House, as Trump has repeatedly urged the central bank to reduce borrowing costs.
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