In a widely expected move, the Fed voted to leave the federal funds rate between 4.25% and 4.50%. Fed Governors Michelle Bowman and Christopher Waller voted in favor of a rate cut while the nine other committee members voted to maintain the rate.
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The Fed’s decision came in line with CME’s FedWatch tool, which assigned 96.9% odds of the Fed leaving rates unchanged.
Earlier today, President Trump urged the Fed to cut rates after the Bureau of Economic Analysis (BEA) announced a second quarter GDP estimate of 3.0%, above the consensus estimate of 2.6%.
“‘Too Late’ MUST NOW LOWER THE RATE. No Inflation! Let people buy, and refinance, their homes!” Trump said on Truth Social in a reference to Fed Chair Jerome Powell delaying rate cuts.
Fed Warns of Economic Uncertainty
In a press release, the Fed noted that unemployment remains low while the labor market is still strong. However, “uncertainty about the economic outlook remains elevated.” During the May Federal Open Market Committee (FOMC) meeting, the Fed said that uncertainty about the economic outlook had diminished.
In another change of language, the Fed said that “growth of economic activity moderated in the first half of the year.” That marks a shift from its May statement, which said “growth of economic activity has continued to expand at a solid pace.”
Track the federal funds rate and other key economic metrics with TipRanks’ Economic Indicators Dashboard.
