The US Federal Reserve is widely expected to keep interest rates unchanged this evening, resisting calls from Donald Trump for aggressive cuts to borrowing costs.
Trump used the release of second-quarter GDP figures to urge the central bank to lower rates, saying it would help people “buy, and refinance, their homes.” He has previously suggested slashing the benchmark rate from its current 4.25%–4.50% range down to 1%.
However, with inflation still above the Fed’s 2% target and unemployment remaining low, markets are betting that the central bank will hold firm for now.
Investors will be watching closely for any clues in the Fed’s policy statement or during chair Jerome Powell’s press conference about the likelihood of a rate cut in September. But with two more rounds of inflation and jobs data due before then, the outlook remains uncertain.
Economists at Deutsche Bank said: “We expect the Fed to hold rates steady for the fifth consecutive meeting and largely maintain existing guidance on the policy outlook.
“In the near term, Powell is unlikely to rule out a September rate cut or increase its likelihood. Instead, with key data still to come, we expect him to emphasise the Fed’s data-dependent approach and a meeting-by-meeting decision process.”
Fed Should Show ‘A Little Bit of Imagination’, Says Treasury Secretary Bessent
US Treasury Secretary Scott Bessent has called on the Federal Reserve to show “a little bit of imagination” when it comes to interest rate policy.
Speaking at an event in Washington, Bessent acknowledged that he does not expect the Fed to cut rates today, according to comments reported by Bloomberg. However, he pointed out that financial markets are already pricing in rate cuts later this year.
