The July Fed meeting concluded today, July 30, with the central bank's latest policy decision.
The Federal Open Market Committee (FOMC) did not cut interest rates this time around, as expected, despite President Donald Trump's repeated calls for Federal Reserve Chair Jerome Powell to lower the federal funds rate.
And, more recently, "these comments have broadened from focusing on interest rates to calls for Chair Powell to resign over the handling of the ongoing $2.5 billion renovation of the Fed's headquarters," says UBS Global Research economist Abigail Watt.
This certainly made Powell's press conference a must-see event as Wall Street, though the Fed chair failed to give any confirmation on a September rate cut – and he refused to offer up any response toward Trump's increasingly combative commentary.
The Kiplinger team is reporting live on the July Fed meeting, bringing you the news and our expert analysis of what it could mean for the economy. Scroll for the latest updates.
How Does the Federal Reserve Work? | Who Will Replace Jerome Powell as Fed Chair? | How the Federal Reserve Affects Mortgage Rates – and What It Means for Homebuyers in 2025
President Trump's tariff policies are beginning to have a slight impact on inflation
Inflation picked up in June, according to the Bureau of Labor Statistics. The Consumer Price Index (CPI) was up 0.3% month over month in June, faster than May's 0.1% increase. The CPI was 2.7% higher year over year, an uptick from the 2.4% rise seen the month prior.
Core CPI, which excludes volatile food and energy prices and is seen as a better measure of underlying inflation trends, was up 0.2% month over month and 2.9% year over year, exceeding May's readings.
The June CPI report "confirms what many have been warning: tariffs are potentially moderately inflationary, and they're beginning to show up in consumer prices," says Matt Mena, crypto research strategist at 21Shares.
But Mena says we'll need to see more data points to confirm this trend.
As for future rate cuts, the strategist notes that the central bank has been preparing for a pivot, but the CPI report "complicates the picture," and the hotter headline figure "could give the Fed pause on cutting rates too soon."
As of June 24, CME Group's FedWatch shows that futures traders are pricing in a quarter-point rate cut in September and another in December.
- Karee Venema
Fed meeting schedule for 2025
The next Fed meeting, which runs from July 29 to July 30, marks the fifth gathering of 2025. That means there are three more to go.
"The committee meets eight times a year, or about once every six weeks," writes Kiplinger contributor Dan Burrows in his feature, "When Is the Next Fed Meeting?".
The Federal Open Market Committee "is required to meet at least four times a year and may convene additional meetings if necessary," Burrows adds, noting that "the convention of meeting eight times per year dates back to the market stresses of 1981."
Fed meetings last two days and wrap up with the release of a policy decision at 2 pm Eastern Standard Time. This is typically followed by the Fed chair's press conference at 2:30 pm.
Here is the full Fed meeting schedule for 2025:
- January 28 to 29
- March 18 to 19
- May 6 to 7
- June 17 to 18
- July 29 to 30
- September 16 to 17
- October 28 to 29
- December 9 to 10
- Karee Venema
The Federal Reserve is not likely to cut short-term rates until closer to the end of 2025
Federal Reserve Chair Jerome Powell has emphasized that the Fed won't cut interest rates until it has a better understanding of how higher tariffs affect longer-term inflation expectations.
And because price effects from tariffs take time to work through the supply chain to the consumer, it's not likely that it will be soon.
Tariffs have only had a small impact on inflation so far. But Powell has noted that professional forecasters believe tariffs will raise inflation this year, at least temporarily.
There's a danger that these price increases could affect longer-term inflation expectations. As a result, Powell feels that it is necessary to maintain a moderately restrictive monetary policy, as the Fed has been doing.
Complicating matters for Powell is that cutting rates now could create market perceptions that the Fed is being unduly influenced by the White House.
The Fed's next policy decision will be released the afternoon of Wednesday, July 30.
- David Payne
Trump heads to the Fed building
President Trump is taking a site tour of the Federal Reserve building in Washington, D.C., this afternoon amid criticism of the central bank's handling of its renovation of the facilities. Specifically, the cost of the improvements is now at $2.5 billion, which is notably higher than the initial $1.9 billion price tag.
As UBS economist Abigail Watt explains, "The renovations first came up in the Chair's semiannual testimony to Congress in June with [Republican] Senator [Tim] Scott of South Carolina calling the renovations 'luxury upgrades that feel more like they belong in the Palace of Versailles.'"
The White House quickly joined the condemnation of the cost of these improvements and used this as example of how Powell is mishandling his duties. Indeed, when asked by a reporter earlier this month if the increased cost is a fireable offense, President Trump said, "I think it sort of is."
The Supreme Court indicated earlier this year that members of the Federal Reserve's board of governors or the Federal Open Market Committee could only be removed "for cause."
Powell has denied any wrongdoing and in a letter to Russell Vought, director of the Office of Management and Budget, noted that the Fed has "taken great care to ensure the project is carefully overseen since it was first approved by the Board in 2017."
- Karee Venema
The labor market is holding steady
The Federal Reserve has a dual mandate of price stability and maximum employment – and both sides appear to be on solid footing at the moment.
While the most recent CPI report showed a slight acceleration in inflation, the data were in line with economists' expectations.
And the June jobs report confirmed a still-healthy labor market. According to the Bureau of Labor Statistics, nonfarm payrolls rose by 147,000 in June, which was a bit higher than May's upwardly revised 144,000 figure and more than the 110,000 new jobs economists expected.
The unemployment rate ticked lower to 4.1%.
The next jobs report won't be released until the Friday after the Fed meeting, but this morning's release of initial jobless claims was more of the same.
Specifically, the Labor Department said first-time unemployment claims fell by 4,000 to 217,000 in the week ending July 18. Economists expected claims to rise by 6,000 to 227,000.
"Although markets are likely already looking ahead to next week's monthly employment data, today's jobless claims total paints a familiar picture – there are still few signs of major cracks in the labor market," says Chris Larkin, managing director of Trading and Investing at E*TRADE from Morgan Stanley.
Larkin adds that if this trend remains intact, the Fed has one less reason to cut interest rates.
- Karee Venema
Home sales data disappoints
New home sales were up 0.6% month over month in June to a seasonally adjusted annual rate of 672,000, according to the Census Bureau. This was below the 649,000 economists expected.
"The slight gain, which follows a sharp contraction in May, reflects weak buyer demand resulting from challenging affordability conditions and heightened economic uncertainty," says Charlie Dougherty, senior economist at Wells Fargo.
The average sales price of a new home sold fell 2% from May to June to $501,000, but was 1.1% higher on a year-over-year basis.
This is just the latest disappointing reading on the housing market. On Wednesday, the National Association of Realtors (NAR) said that existing home sales were down 2.7% from May to June to a seasonally adjusted annual rate of 3.93 million. Economists expected 4.01 million.
"High mortgage rates are causing home sales to remain stuck at cyclical lows," said NAR Chief Economist Lawrence Yun. "If the average mortgage rates were to decline to 6%, our scenario analysis suggests an additional 160,000 renters becoming first-time homeowners and elevated sales activity from existing homeowners."
President Trump, meanwhile, used the housing data to issue a swipe at the Fed chair. "Housing in our Country is lagging because Jerome 'Too Late' Powell refuses to lower Interest Rates," Trump wrote in a Wednesday morning post on Truth Social. "Our Rate should be three points lower than they are, saving us $1 Trillion per year (as a Country). This stubborn guy at the Fed just doesn't get it – Never did, and never will."
- Karee Venema
ECB holds rates steady
On Thursday, the European Central Bank (ECB) concluded its July policy meeting by holding its deposit rate steady at 2%.
This marked the first pause in the ECB's rate-cutting campaign that began last year when its key interest rate was at a record high of 4%.
"The environment remains exceptionally uncertain, especially because of trade disputes," the European Central Bank wrote in its policy statement.
The European Union and the U.S. are currently undergoing trade negotiations. The EU is pushing for 15% tariffs across the board, while President Trump has threatened 30% tariffs on European imports.
On Thursday, all but one EU country (Hungary) voted in favor of retaliatory tariffs that will go into effect on August 7 should the two countries fail to come to an agreement.
- Karee Venema
Um… the CEO said what about the Fed chair?
Your friendly neighborhood super-AI assistant is well aware that, until recently, it was less than rare for CEOs of publicly traded companies beyond the financial services sector – and rare even for heads of banks – to talk in specific terms about who should be and who should not be Federal Reserve chair.
The times they have a-changed, to the tune of President Donald Trump.
Among the non-financial executives to chime in so far, none has played louder notes than Cleveland-Cliffs (CLF) Chairman, President and CEO Lourenco Goncalves.
"Once Chairman Jerome Powell is gone," Goncalves said at the climax of his company's second-quarter conference call, "and that is not a matter of when, not if, and as soon as interest rates come down by 50 or 75 basis points, the automotive sector will take off again."
Goncalves is referring, specifically, to the fact that higher interest rates puts buying cars for many folks out of reach and that lower rates will make automobile purchase more affordable.
"Demand is there, but this Fed chairman will not act," he concluded. "So we need a new Fed chairman appointed as soon as possible."
We continue to track conference calls this earnings season for commentary on Trump vs Powell, and we'll have more soon…
- David Dittman
When does Jerome Powell's term as Fed chair end?
President Trump has not been subtle in his desire to fire Fed Chair Powell.
Earlier this month, stocks went on an intraday roller-coaster ride amid reports that Trump asked several Republican members of the House of Representatives if they thought he could remove Powell from his post.
But the question of whether or not Trump can fire Powell is seemingly moot given that his term as Fed chair is up in less than a year from now – on May 15, 2026.
It's unlikely that those in Trump's inner circle will encourage him to disrupt the status quo – and potentially send stocks and bonds tumbling – when Powell has such a small amount of time left in his term.
For what it's worth, Powell's term as a member of the Board of Governors of the Federal Reserve ends on January 31, 2028.
- Karee Venema
Durable goods orders fall less than expected in June
Durable goods are the lone data point on Friday's economic calendar. According to the Census Bureau, new orders for manufactured goods made to last three years fell 9.3% from May to June to $311.8 billion.
Still, this was better than the 11.3% drop economists expected.
Excluding transportation, new orders were 0.2% higher. Excluding defense, orders were down 9.4%.
June's durable goods decline marks a sharp contrast to May's 16.4% surge, but Priscilla Thiagamoorthy, senior economist at BMO Capital Markets, says "wild swings like this are usually centered around volatile transportation equipment."
In June, transportation equipment orders fell 22.4% – the biggest decline since the onset of the pandemic – "as Boeing (BA) bookings took a nosedive," she adds.
The bottom line, according to Thiagamoorthy, is that the "the decline in nondefense capital goods bookings suggests a weaker handoff for Q3 business investment after robust gains earlier this year."
- Karee Venema
Wall Street has a lot to look forward to during Fed week
"Next week is a bit like the Super Bowl, World Series, and Stanley Cup all rolled together," says Scott Helfstein, head of investment strategy at Global X.
In addition to the Fed decision, the economic calendar features the first reading on second-quarter gross domestic product (GDP), the Personal Consumption Expenditures (PCE) Price Index – the central bank's preferred measure of inflation – and the July jobs report.
"That will be a lot for markets to process in a short window," Helfstein notes.
As for the economy, Helfstein says that it looks strong by most metrics, though next week's data will provide key updates. "Growth may well come in above forecasts that built in drag from tariffs yet to really materialize. Meanwhile, job growth is slowing but has also consistently beat expectations."
As for the Fed, Helfstein says that Chair Powell "has signaled an intent to hold rates steady and wait for more data," and there's little reason to believe the central bank will shift from this strategy.
"They can be patient, and there is a lot of data coming in," he concludes.
- Karee Venema
Who votes on Fed policy?
The Federal Open Market Committee, or FOMC, is the Federal Reserve's policy-setting group. It has 12 members, eight permanent and four who rotate each year.
The eight permanent voting committee members include the Fed chair and vice chair, the five Fed governors and the president of the New York Fed.
Four regional Fed presidents are rotated in each calendar year.
The 2025 FOMC voting committee consists of:
- Fed Chair Jerome Powell
- Vice Chair Philip Jefferson
- Fed Governor Michael Barr
- Fed Governor Michelle Bowman
- Fed Governor Lisa Cook
- Fed Governor Adriana Kugler
- Fed Governor Christopher Waller
- New York Fed President John Williams
- Boston Fed President Susan Collins
- Chicago Fed President Austan Goolsbee
- St. Louis Fed President Alberto Musalem
- Kansas City Fed President Jeffrey Schmid
In 2026, the presidents from Cleveland, Philadelphia, Dallas and Minneapolis will rotate in as FOMC voting members, according to the Federal Reserve.
- Karee Venema
Q2 GDP should come in strong ... but don't be fooled
First-quarter GDP came in at -0.5%, marking the first contraction of the U.S. economy since Q1 2022. However, this figure was impacted by a surge in imports as consumers accelerated purchases ahead of Trump's "Liberation Day" tariffs.
This time around, BofA Securities economists think second-quarter gross domestic product will likely arrive 2.3% thanks to "a reversal of the surge in imports due to pre-tariff front loading in Q1."
And while this does "indicate that the weak growth of the first quarter will be reversed," writes David Payne, staff economist at The Kiplinger Letter, in his GDP outlook, investors "shouldn't be fooled by the strength in the second quarter."
A more reasonable view of economic growth, according to Payne, is to average the two numbers from Q1 and Q2 to see the growth rate for the first half.
- Karee Venema
The Fed's independence
President Trump has taken to social media posts and public statements in order to discredit Jerome Powell as Fed chair. And in doing so, he's also undermined the independence of the Fed.
What does that mean, the "independence of the Fed"? LPL Financial Chief Economist Jeffrey Roach defines it as "the ability to pursue their congressional mandate (full employment and stable prices) without outsider influence."
The Fed, Roach observes, "has a representative nature to it, desirous in protecting investors from politicized policy-making."
At the same time, however, "We shouldn’t be surprised that the executive branch is lobbying for lower rates. That's been the case during various administrations from Reagan to Obama."
President Trump still faces a basic mathematical hurdle, even if he gets what he thinks he wants. The Federal Open Market Committee sets interest rates based on a vote of its 12 members. The chair casts one vote.
And, anyway, Roach says, "There is no reason to aggressively cut rates down to one or two percent when inflation is above the Fed’s target, unemployment is low, and the economy is still growing."
Roach concedes the fed funds rate is higher than benchmarks set by several other central banks such as the European Central Bank, and that the Fed has room to cut "a few quarter points" by the end of 2025 if inflation stabilizes.
"But," he adds, "with privilege comes responsibility. The exceptional nature of our economy, the depth of our capital markets, and the safety of our legal structure often warrant a policy rate above international rates."
- David Dittman
The stock market has a "perfect week" ahead of the Fed
Friday marked the end of a "perfect week" for the stock market, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.
The S&P 500 opened the week "with a new intraday (6,336.08) and closing high (6,305.60), and continued that path for the entire week, as it went on to set a new closing record on Tuesday, Wednesday, Thursday and Friday (with an intraday high of 6,395.82 and a closing high of 6,388.64)," Silverblatt notes.
Friday's settlement marked the S&P 500's 14th new closing high of the year and the 24th since Election Day.
Silverblatt says the last time the S&P 500 had a "perfect week" was in November 2021.
The Nasdaq Composite also closed the week at a new record high (21,108.32), while the Dow Jones Industrial Average, at 44,901.92, sits less than 0.3% below its record high of 45,014.04 from December 4.
- Karee Venema
What could unfold at Powell's press conference
Here are the things to watch for in Fed Chair Powell's press conference at 2:30 pm EST on July 30:
- If Powell emphasizes the risk of a tariff pass-through to inflation expectations, then he could delay a rate cut until late in the year.
- If he focuses on improving or stabilizing services inflation, then he is likely thinking that potential inflation is not as worrisome, and he could be willing to cut short rates at the following policy meeting on September 17.
Powell may talk about both these things, but it all depends on the theme of emphasis he makes in response to the reporters' questions.
And there's the possibility that he doesn't hint at the Fed's direction at all during next week's press conference.
If he chooses, he can tip his hat during his speech on the morning of August 22 at the Jackson Hole conference on monetary policy that the Fed sponsors every year. Last year, Powell chose his Jackson Hole speech to signal an intent to start cutting rates again at the Fed's policy meeting the next month.
- David Payne
What time will the Fed statement be released?
The Federal Open Market Committee will release its updated policy statement at 2 pm Eastern Standard Time on Wednesday, July 30.
"Although swings in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace," the FOMC noted in its June policy statement. "The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated."
The central bank also indicated in its June statement that it "will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities."
"This is an important development," wrote Raymond James Chief Economist Eugenio Alemán and Economist Giampiero Fuentes at the time, "because many had expected that the Fed was going to stop the process of reducing the balance sheet during this summer."
- Karee Venema
Dow futures signal positive start to Fed week
Futures on the blue-chip Dow Jones Industrial Average are marginally higher Monday morning, signaling a positive start to Fed week. Futures on the S&P 500 and Nasdaq are also in the green.
Lifting sentiment is news that the U.S. has reached a trade deal with the European Union, which will impose a 15% tariff on most goods sent to the U.S., including automobiles.
"The E.U.-U.S. trade deal removes a significant layer of uncertainty from markets, as this is one of the most important trade deals announced since the start of the entire tariff regime a few months ago," says Paul Stanley, chief investment officer of Granite Bay Wealth Management.
Stanley notes that the removal of this uncertainty is a "positive for markets and this deal is a signal to markets that we can soon move on from this issue and focus more on fundamentals."
As for the Fed, he says that while the central bank "is under pressure to cut interest rates, it's clear that this economy has been able to and should continue to be able to withstand the current level of interest rates."
- Karee Venema
The White House presses for rate cuts again
The Trump administration again called for the Federal Reserve to start cutting interest rates sooner rather than later.
On Sunday, Russell Vought, director of the Office of Management and Budget, spoke to CNN's Jake Tapper, saying interest rates should be "dramatically lower" than where they are currently.
"We believe, on a host of fronts, Chairman Powell has been too late," Vought said, adding that President Trump's criticisms of the Fed chair are strictly articulating "the views of the American people."
Vought also noted that Trump has no intention to fire Fed Chair Powell.
Meanwhile, Commerce Secretary Howard Lutnick took to Fox News on Sunday to say it "makes no sense" that rates are paused at current levels.
"The president's bringing in hundreds of billions of dollars, reducing our deficit. How can that not be the underpinning for us having less debt and lowering rates?," Lutnick questioned.
- Karee Venema
It's a busy week for earnings, too
Not only is it a jam-packed week on the economic front, but the earnings calendar is full of high-profile prints too.
Among the noteworthy reports we're tracking are those from Amazon.com (AMZN) and Apple (AAPL), which are both due after Thursday's close.
CFRA Research analyst Arun Sundaram thinks Amazon will beat on both the top and bottom lines for its second quarter amid strength in retail, advertising and Amazon Web Services (AWS).
"That said, we wouldn't be surprised by a cautious Q3 outlook, given ongoing tariff uncertainties and rising Project Kuiper expenses as satellite launches ramp in the second half of 2025," Sundaram adds.
Meanwhile, Morgan Stanley analyst Erik Woodring believes Apple will report solid fiscal third-quarter results.
Woodring feels that strength in the quarter was driven by product sales, "better-than-feared Services growth" and forex tailwinds, but he's keeping a close eye on what's around the corner.
Specifically, while he'd "argue that the setup into June quarter earnings is more positive than negative … any outperformance into earnings is likely to be short-lived until we get clarity" on near-term uncertainties, including tariffs and Apple's AI strategy.
- Karee Venema
The July jobs report will be released after the Fed meeting
The Federal Open Market Committee will get one last look at the labor market ahead of Wednesday's policy decision, with June's Job Openings and Labor Turnover Survey (JOLTS) set to be released Tuesday morning.
Economists are expecting a modest decline in job openings, to 7.35 million from May's 7.77 million.
In his late-June congressional testimony, Fed Chair Powell reiterated that the labor market remains strong.
However, he also noted that if it were to "meaningfully weaken in a way that was concerning," the central bank could be inclined to consider rate cuts sooner rather than later. But this doesn't seem to be a major worry at the moment.
"The June jobs report came in stronger than expected," writes David Payne in the Kiplinger jobs outlook, though noting that "private-sector jobs grew by a more modest 74,000."
Payne points to additional signs of a slowing labor market, including a decline in hours worked and decelerating wage growth.
For the July report, which will be released ahead of the open this Friday, August 1, BofA Securities economists believe 60,000 new jobs were created, with state and local government payrolls dropping after June's spike.
"It is probably too early to see a big impact from immigration policy," the group writes. "But high continuing claims and unfavorable seasonals could be headwinds."
- Karee Venema
Should you buy a long-term CD before the Fed starts cutting rates?
Inflation remains sticky and concerns that President Trump's tariffs will keep it that way have the Federal Reserve on the sidelines when it comes to rate cuts. However, the central bank is expected to resume lowering the federal funds rate this fall.
Higher interest rates in recent years have boosted savings rates and many savings vehicles can still earn you well over 4%, allowing you to outpace inflation and maximize earnings.
Those looking to maximize savings ahead of an expected rate cut have several options, including locking in a long-term CD.
CDs are market-resistant in that they come with fixed interest rates. It means if you choose a five-year CD and the Fed decides to cut interest rates in the future, the rate you have won't change until after your CD matures.
- Sean Jackson
Big bankers on the importance of Fed independence
Lourenco Goncalves, who runs Ohio-based steel manufacturer Cleveland-Cliffs (CLF), went out on a White House-nurtured limb when he said during his company's second-quarter conference call that "we need a new Fed chairman appointed as soon as possible."
Goncalves, who is chairman, president and CEO of CLF, noted that Powell's departure "is a matter of when, not if," which is factually true.
He added that the automotive sector, a key end-market for his company's steel, "will take off again" once he's gone, which is a matter of conjecture.
CEOs of the biggest banks in the U.S. are speaking more broadly in defense of central bank independence rather than invoking any names.
JPMorgan Chase (JPM) Chairman and CEO Jamie Dimon has been the most vocal defender of the institution: "I think the independence of the Fed is absolutely critical. Playing around with the Fed can have adverse consequences, the absolute opposite of what you might be hoping for."
Bank of America (BAC) Chairman and CEO Brian Moynihan has also weighed in. "The Fed is an independent agency," Monynihan said, "and they are meant to be outside the purview of the executive, and Congress. They are called to task, and monitored, and reviewed. The reality is they were set up to be independent."
Citigroup (C) CEO Jane Fraser and Goldman Sachs (GS) Chairman and CEO David Solomon were similarly expansive."The independence of the Federal Reserve drives its credibility," Fraser said. "It is critical to the effectiveness of our capital markets and US competitiveness."
Solomon underscored the global significance of the issue: "I think central bank independence, not just here in the United States but around the world, has served us incredibly well."
I think central bank independence, Fed independence, is very important and it’s something we should fight to preserve."
- David Dittman
The rate cut trend
Ninety-seven-point-nine is not 100%, but with a little more than 48 hours to go until decision-time, it's hard to imagine what could happen to change as many minds of voting members of the Federal Open Market Committee as would be necessary to effect an interest rate cut at this week's meeting.
People will be watching for changes in the vote totals, however, with an eye on the September FOMC meeting.
FedWatch currently shows a 63% probability that Powell and company will cut the federal funds target range by 25 basis points at its meeting after this one.
Those odds were 74.8% as of June 27 and declined to 56% on July 21. They climbed back up to 61.9% Friday.
The recent uptick may or may not reflect the impact of President Trump's campaign for lower interest rates.
Fed Governor Christopher Waller, who has explained his concern for the underlying health of the labor market in multiple public forums, is likely to dissent from a vote to hold the fed funds target range at 4.25% to 4.50%.
Waller has been mentioned as a potential successor to Fed Chair Powell.
- David Dittman
Where are all the Fed speakers right now?
The Fed-speak is non-existent right now. That's by design. And, setting aside arguments about correlation vs causation, markets are behaving well in the silence.
Since Saturday, July 19, and until Thursday, July 31, participants in the FOMC meeting have been bound by a Federal Reserve policy that limits the extent they can talk about the economy and interest rates.
These two-week "blackout periods" begin the second Saturday that falls 10 days before the next FOMC meeting and end the Thursday that follows the meeting. The Fed's blackout period was an unofficial practice that began in the 1980s until it was formalized in 2011. And it was reaffirmed in January.
Fed-watchers see the policy as a measure against corruption and the potential for information leaks to distort markets. It also provides cover for open discussion during the Fed's most intense periods of policy-making.
Here is a schedule for all blackout periods through January 2027.
During the current quiet period, the S&P 500 is up 1.3%, the Dow Jones Industrial Average 1.0% and the Nasdaq Composite 1.2%.
- David Dittman
Stocks end mixed after EU-U.S. trade deal
The European Union and the U.S. on Sunday agreed to set a 15% tariff on most goods that the EU exports to the United States, including cars and pharmaceuticals. The agreement also stipulates that the European Union buy $750 billion of U.S. energy and invest an additional $600 billion in the United States.
While a zero-percent tariff on a number of goods, including aircraft and semiconductor equipment, was also part of the agreement, adjustments to the current 50% tariff on steel and aluminum imports were not.
The announcement follows recent news of trade deals with Japan, the Philippines and Indonesia.
"We believe the trade deals settled on thus far can benefit American companies in the long run," says Megan Horneman, chief investment officer at Verdence Capital Advisors. But in the near term, she warns that tariffs "threaten margins, potentially inflation and elevated multiples."
Horneman says that the stock market appears to be phasing out any tariff threat and is instead focusing on a strong start to earnings season.
As for today's market moves, the Nasdaq Composite closed up 0.3% at 21,178, while the S&P 500 added 0.02% to end at 6,389.
The Dow Jones Industrial Average slipped 0.1% at 44,837 on weakness in insurance giant Travelers Companies (TRV) and paint maker Sherwin-Williams (SHW).
- Karee Venema
Futures indicate a positive open
Futures for the three main equity market indexes pointed higher a little less than an hour before the opening bell at the New York Stock Exchange.
The S&P 500 is working on a streak of six consecutive new closing highs and has now made 15 new all-time highs so far in 2025.
The Nasdaq Composite also posted a record closing high Monday. The Dow Jones Industrial Average is 176.48 points, or 0.4%, away from its own new high.
The 2-year U.S. Treasury yield was down to 3.906% from 3.922% Monday. The 10-year U.S. Treasury yield was lower too, 4.386% vs 4.42%, as was the 30-year, 4.924% vs 4.965%.
Is the Fed still sorting pandemic fallout?
"Downtown" Josh Brown is not just a CNBC icon. He's one of the original stock market bloggers, he's a podcasting powerhouse, and he's the CEO of Ritholtz Wealth Management, one of the fastest-growing registered investment advisory firms in the U.S.
During a recent episode of The Compound and Friends, which he co-hosts with RWM Managing Partner Michael Batnick, Brown did what he's been doing since his Reformed Broker days and shared some plain thoughts on monetary policy.
"I agree with Neil Dutta" of Renaissance Macro Research Brown wrote in a LinkedIn post summarizing his views by quoting the economist:
Trump is not going to fire Powell. He will just be noisy about not firing him. You get rid of Powell, you lose a scapegoat. Let Powell earn the 'too late' moniker.
Powell is not going to resign because legacy protection in his mind involves standing up to the White House.
"He's probably right," Brown added. And here's the kicker:
Also, no reason not to cut. Lower rates don't create inflation, like it's a magic trick. Inflation comes from supply shocks and people getting so much fiscal assistance they can all quit their jobs en masse, sitting around doing nothing. it doesn't come from a Fed Funds rate dropping 50 basis points.
He's referring, of course, to the federal government's response to COVID-19.
More traditional analysts also note pandemic effects and lingering impact on current policy, but find merit in the Fed's wait-and-see approach.
Noting that "one factor adding to the complexity is the post-pandemic impact on economic and financial models," LPL Financial Chief Economist Jeffrey Roach concludes a "more complex macro environment will force the Federal Reserve to maintain its cautious stance on monetary policy for longer than markets originally expected."
Roach cites last week's Leading Economic Index (LEI) release from the Conference Board, which "still points to a deep, imminent recession as of last month" and "is at its lowest since 2015."
The LEI, Roach notes, "has signaled a recession since mid-2022, when businesses were madly raising wages to attract qualified workers and consumers – especially the upper-income – who were wildly spending discretionary dollars on travel, autos, and luxury items."
Roach explains that the LEI "it illustrates the challenging macro environment that the Fed and investors must navigate."
– David Dittman
The labor part of the Fed's dual mandate is "little changed"
The monthly Job Openings and Labor Turnover Summary (JOLTS) from the Bureau of Labor Statistics is a source of "fresh data on measures of labor slack that Powell follows closely," according to Deutsche Bank U.S. Economist Amy Yang.
The BLS said Tuesday that job openings were "little changed" in June at 7.4 million.
Hires and total separations were "little changed" too, at 5.2 million and 5.1 million, respectively. Quits were "little changed" at 3.1 million, though layoffs and discharges were "unchanged" at 1.6 million.
May openings were revised down by 57,000 to 7.7 million. Hires were also revised down, by 38,000 to 5.5 million, and so were total separations, by
29,000 to 5.2 million. Quits were revised down by 23,000 to 3.3 million, but layoffs and discharges were revised up by 10,000 to 1.6 million.
"Barring a meaningful drop off in the private sector hiring rate and/or notable increase in the layoff rate," Yang writes, "Powell (and the FOMC) should have more confidence in continuing to describe the labor market as 'solid.'"
– David Dittman
And still stocks (are mostly on the) rise
There is so much happening right now – the next Fed meeting is underway, the earnings calendar is as full as it's going to be all year, and President Donald Trump's most recent tariffs deadline is Friday – and yet markets continue to maintain an even strain.
Some day down the road people with responsibility a lot greater than the maintenance of a live Fed blog will unpack the resilience of the stock market in particular since Liberation Day, which now roughly marks the start of one of the fastest, highest rallies ever.
Indeed, the Cboe Volatility Index (VIX), known far and wide as the market's "fear index," spiked some before noon Tuesday but remains well within its "normal" range of 12 to 20 – and far from the 60.13 April 7 intraday post-Liberation Day peak. Retreat from that fear has been historic too.
The stock market is still, at least in theory, a mechanism to price the present value of future cash flows, and the numbers continue to suggest there's more to come with this business of President Donald Trump and the impact of his tariffs, despite headlines suggesting all's clear with regard to Europe, for example.
"Uncertainty" is still a good word to describe the status quo, though Procter & Gamble's (PG) price hikes offer some clues as well.
The three main U.S. equity indexes have turned red as of the noon hour at the New York Stock Exchange, and the VIX did see a bit of an intraday spike.
At the same time, if you forecast the indexes would be in all-time-high territory only so far from Liberation Day – and the VIX would be so far from its recent high – you're on a lonely island.
– David Dittman
The Fed will do what Trump wants (cut) but not when he wants (now)
Nick Timiraos of The Wall Street Journal summarized the state of play amid the next Fed meeting (which is underway as of today).
"The Federal Reserve is currently in a fascinating predicament," Timiraos shared in a preview-post on LinkedIn, "grappling with when to resume lowering interest rates. After pausing earlier this year due to inflation fears spurred by President Trump's tariffs, officials are now divided into (approximately) three camps."
Under the WSJ link (which we've unlocked for you), we learn Fed officials generally agree they'll have to cut eventually. But they're not ready right now.
"The questions dividing them," Timiraos reveals, "center on what evidence they need to see first, and whether waiting for that clarity turns out to be a mistake."
Forward guidance will likely dictate the market's reaction to the Fed
The outcome of a Federal Open Market Committee meeting and Fed chair press conference has the ability to spark volatility in the stock and bond markets.
As just one example, last December, the main stock market indexes declined between 2.6% and 3.6% after Fed Chair Powell warned in his presser that the central bank expected fewer rate cuts in 2025.
This time around, Jordan Rizzuto, managing partner and chief investment officer at GammaRoad Capital Partners, expects "any material market reaction" will "be driven by the Fed's forward guidance, given the lack of significant changes in the economic backdrop" since the June Fed meeting."
Growth measures have not deteriorated further, labor market trends have remained stable, and anticipated inflationary pressures from trade policy have not yet materialized," Rizzuto says. "Additionally, equity market valuations, credit spreads, and dollar weakness do not suggest any immediate signs that financial conditions are too restrictive."
He adds that this makes it "challenging" for the Fed to adjust its wait-and-see approach, though the "proximity to the upcoming annual symposium in Jackson Hole ... provides flexibility to shift guidance should any unexpected events abruptly change the Fed's outlook in the interim."
The 2025 Jackson Hole Economic Policy Symposium will run from August 21 through August 23, with this year's focus on a transitioning labor market.
– Karee Venema
House says no Fed CBDC
The House of Representatives passed three relevant bills during its "Crypto Week" in mid-July, including the GENIUS Act to regulate stablecoins.
President Donald Trump signed the GENIUS Act, which cleared the Senate in June, into law on July 18, four days after bitcoin hit a new all-time high above $123,000.
Bitcoin has moved in a relatively tight range since then and was trading around $117,500 at Tuesday's closing bell, down 0.5% over the preceding 24 hours.
The House also passed the CLARITY Act on digital asset market structure. And it advanced the Anti-CBDC Surveillance State Act, which would ban the Federal Reserve from establishing a central bank digital currency.
According to The Hill, the Senate will consider the CLARITY Act and the CBDC ban when it returns from recess in August.
The Fed addressed the CBDC concept in a January 2022 research paper, Money and Payments: The U.S. Dollar in the Age of Digital Transformation.
"CBDC is defined as a digital liability of the Federal Reserve that is widely available to the general public," researchers explain, noting as well that Federal Reserve notes – or physical "fiat" currency – are the only type of central bank money available to the general public.
They note too that like existing forms of money, a CBDC would enable people to make digital payments.
"As a liability of the Federal Reserve, however, a CBDC would not require mechanisms like deposit insurance to maintain public confidence," they also note, "nor would a CBDC depend on backing by an underlying asset pool to maintain its value. A CBDC would be the safest digital asset available to the general public, with no associated credit or liquidity risk."
Fed officials have acknowledged establishing a CBDC would take at least five years, and Fed Chair Powell has said it won't happen during his tenure, which ends in May 2026.
As The Hill reports, the Anti-CBDC Surveillance State Act would ban the Fed from directly or indirectly issuing a CBDC or studying the issue. President Trump issued an executive order in January that bans executive agencies from pursuing CBDC.
According to the bill's sponsor, Rep. Tom Emmer of Minnesota, CBDC is "government-controlled programmable money that, if designed without the privacy protections of cash … could give the federal government the ability to surveil and restrict Americans’ transactions and monitor every aspect of our daily lives."
– David Dittman
Stocks are down ahead of Fed Day
The S&P 500 was down 0.3%, the Nasdaq Composite lost 0.4%, and the Dow Jones Industrial Average was off 0.5% Tuesday, drifting lower after a light-green open the first day of this week's Fed meeting.
The S&P put up its first negative number after a six-session winning streak. And tech stocks declined from all-time highs with four Magnificent 7 stocks scheduled to report earnings over the next couple of days.
Troubled health care stock UnitedHealth Group (UNH, -7.55) dragged on the Dow, this time because of downbeat guidance instead of a federal investigation of its Medicare Advantage business.
The 2-year U.S. Treasury yield ticked down to 3.871% from 3.922% Monday. The 10-year yield was down to 4.324% from 4.42%, the 30-year to 4.861% from 4.965%.
Price action in the federal funds futures market indicates a 97.9% probability the Fed will hold the target range for its benchmark interest rate at 4.25% to 4.50%, up from 96.9% yesterday.
FedWatch shows a 64.7% probability the Fed cuts by 25 basis points in September, up from 63.1% Monday.
– David Dittman
The U.S. economy was stronger than expected in Q2
The first reading on second-quarter gross domestic product (GDP) came in higher than expected. According to the Bureau of Economic Analysis, the U.S. economy grew at a 3% annualized rate in the three months ending June 30, exceeding economists estimates for 2.5% growth.
"The increase in real GDP in the second quarter primarily reflected a decrease in imports, which are a subtraction in the calculation of GDP, and an increase in consumer spending," the BEA said. "These movements were partly offset by decreases in investment and exports."
Josh Jamner, senior investment strategy analyst at ClearBridge Investments, says the reading is "messy," and while it came in ahead of estimates, it shows "a slower underlying trend of economic momentum once trade-related distortions are accounted for."
Jamner notes that Q2 GDP "was boosted by a sharp reduction in imports that lifted the headline figure by 5.2%," and marked a reversal of the weak Q1 reading that was pressured by a surge in imports as consumers accelerated purchases ahead of President Trump's early April tariff announcement.
"With that activity having played out, consumers and businesses are retrenching and final sales to private domestic purchasers – a 'core' GDP concept that excludes trade, inventories, and government spending – rose just 1.2%, the weakest reading since late 2022," the analyst says.
Jamner adds that today's GDP reading "implies a stronger core PCE reading tomorrow as well as upward revisions to prior months, which chips away at the case for Fed rate cuts in the near term, pushing Treasury yields higher across the curve this morning."
At last check, the yield on the 2-year Treasury note was up 4.1 basis points at 3.916%, while the yield on the 10-year note was 4.2 basis points higher at 4.37%.
- Karee Venema
Stocks open cautiously higher on Fed day
Stocks opened cautiously higher ahead of this afternoon's FOMC policy statement. At last check, the blue chip Dow Jones Industrial Average was up 0.03%, the broader S&P 500 was 0.07% higher and the tech-heavy Nasdaq Composite had gained 0.2%.
Today's big movers include Palo Alto Networks (PANW), which is down 8% on news it is buying fellow cybersecurity firm CyberArk Software (CYBR, -2%) in a deal valued at around $25 billion, and Marvell Technology (MRVL), which is up 9% after Morgan Stanley analysts lifted their price target on the semiconductor stock to $80 from $73.
- Karee Venema
Potential dissents could mark a first for the Fed in decades
In June, all 12 voting members of the FOMC agreed to keep the federal funds rate at its current range of 4.25% to 4.5%. But the July Fed meeting could mark a break in this consensus.
In recent weeks, Fed Governors Michelle Bowman and Christopher Waller, both President Trump appointees, have said that they are not totally against supporting a rate cut at this month's meeting.
"Should inflation pressures remain contained, I would support lowering the policy rate as soon as our next meeting in order to bring it closer to its neutral setting and to sustain a healthy labor market," Bowman said in a June 23 speech.
And during a July 17 appearance at New York University, Waller said he believes the FOMC should reduce its policy rate by 25 basis points at this month's meeting because any tariff impact will be a one-off increase and the labor markets "looks fine on the surface."
The Fed governor added that when taken together, "the data imply the policy rate should be around neutral, which the median of FOMC participants estimates is 3 percent, and not where we are – 1.25 to 1.50 percentage points above 3 percent."
A dissent by both of these FOMC participants would mark the first time two committee members voted against the consensus since 1993.
- Karee Venema
How about a rate hike…
There is no chance President Donald Trump will nominate William L. Silber, a former member of the Economic Advisory Panel of the Federal Reserve Bank of New York, to replace Fed Chair Jerome Powell or even to serve on the central bank's board of governors.
Silber does raise a provocative argument in an op-ed piece for The Wall Street Journal, though.
"No one on the FOMC knows precisely the appropriate interest rate needed for price stability and maximum employment," Silber writes. "And neither does any Nobel Prize-winning economist."
Silber explains, "The so-called neutral rate of interest is observed in hindsight – by whether the economy is expanding fast enough to keep unemployment low but not too fast to provoke higher inflation."
If we're looking at the incoming data, he deduces, "the current target interest rate of 4.25% to 4.50% seems about right."
At the same time, unemployment is low but inflation is "somewhat elevated," which "suggests, if anything, the target interest rate should be higher to push down inflation."
- David Dittman
Private payrolls come in stronger than expected
Ahead of the Labor Department's release of the monthly jobs report, slated for this Friday morning, ADP this morning said the U.S. added 104,000 private payrolls in July.
This was a notable turnaround from June's revised 23,000 decline in private-sector jobs and well above economists' forecast for 64,000 new positions.
The leisure and hospitality industry added 46,000 new jobs, while construction payrolls increased by 15,000. Only one industry – education and health services – lost jobs in July, according to ADP, shedding 38,000 payrolls.
"Our hiring and pay data are broadly indicative of a healthy economy," says Dr. Nela Richardson, chief economist at ADP. "Employers have grown more optimistic that consumers, the backbone of the economy, will remain resilient."
- Karee Venema
Where to watch Fed Chair Powell's press conference
There are plenty of ways to watch Fed Chair Jerome Powell's post-meeting press conference, which begins today at 2:30 pm EST.
The Federal Reserve Board will feature a live broadcast on its website. It can also be watched on the Federal Reserve's YouTube channel.
Several media sites, including Kiplinger, will also provide direct links to live coverage of the presser.
- Karee Venema
The Fed decision is in
The Federal Reserve kept the federal funds rate unchanged, as expected.
There were two dissenting votes – Governors Michelle Bowman and Christopher Waller – who wanted to lower interest rates by a quarter-percentage point.
The dissenting votes were expected. Waller had made a speech recently arguing that the tariff impact on inflation would be temporary.
- David Payne
What changed in the July FOMC statement
Changes to the FOMC's latest policy statement include the following:
Although swings in net exports continue to affect the data, recent indicators suggest that growth of economic activity moderated in the first half of the year. (Previously read: Although swings in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace.)
Uncertainty about the economic outlook remains elevated. (Previously read: Uncertainty about the economic outlook has diminished but remains elevated.)
- Karee Venema
We'll see updated economic projections at the September Fed meeting
There was no new Fed economy forecast or poll of committee member views this time around, as those are done only every other meeting. These will be offered when the next Fed meeting concludes on September 17.
Outside of today's press conference, Fed Chair Jerome Powell will have a chance to explain his views at the central bank's annual Jackson Hole symposium on monetary policy on August 22. Last year, Chair Powell used his conference speech as an opportunity to signal an intent to start cutting rates.
- David Payne
The relationship between the Fed and grocery prices
Kiplinger personal finance writer Rachael Green says that with the rate held steady, "you might be wondering if there's any hope for an upcoming cut in the federal funds rate, and if a cut would bring grocery prices down."
She broke down the relationship between grocery prices and the Federal Reserve, showing how they play off each other.
Read more: What Federal Interest Rates Mean for Your Grocery Bill
Experts chime in after the July Fed decision
With the July Fed meeting now in the books, here's some of what economists, strategists and other experts around Wall Street have to say about the outcome and what it could mean for investors going forward.
"As expected Governors Bowman and Waller were dovish outliers, with the majority of the FOMC instead preferring to wait to learn more about the inflation process over the summer. The next two months data will be pivotal and we see a path to a resumption of the Fed’s easing cycle in the autumn should tariff inflation prove more modest than expected or the labor market show signs of weakness." Ashish Shah, CIO of Public Investing at Goldman Sachs Asset Management
"While the Fed held rates at its July meeting, the two dissents highlight the fracturing view of potential tariff impacts on the economy and inflation. Employment and consumption have both been resilient through the volatile first half of 2025 but have shown signs of broader softening. While inflation data is still in the driver's seat of the Fed's dual mandate, employment will likely begin to take on more focus following the implementation of tariffs on August 1st, and as the economy begins to settle into its new normal." – Ryan Weldon, Investment Director, Portfolio Manager at IFM Investors
""The odds are increasing for a September rate cut as the range of economic outcomes for trade negotiations narrows as more deals are finalized. There are still several consequential trade agreements outstanding, but markets were largely unfazed by the August 1 deadline announcement. It appears markets have digested and are now comfortable in the short term with a baseline tariff of 15-20% for most countries." Ross Bramwell, Principal at Homrich Berg
"The Fed did highlight that economic growth had moderated in the first half of the year, and that may open the door to a September rate cut. We continue to see strong corporate fundamentals and consumer spending into the next quarter, so the full year economic growth estimate may be too low. Today’s strong nominal growth may trigger a revision in the coming weeks." – Scott Helfstein, Head of Investment Strategy at Global X
- Karee Venema
Powell won't commit to a September rate cut
In his opening statement, Chair Powell indicated that the Fed is still in wait-and-see mode on whether an interest rate cut is appropriate.
A major concern is whether new tariffs will push up prices on an ongoing basis, or just result in a one-time rise. He said more time is needed to judge which way this could go.
Asked point-blank if it's likely that the Fed will cut its interest rate at its next meeting in September, Powell demurred. He noted that current economic conditions don't indicate that the present level of interest rates is holding back economic activity, which suggests he is not in a rush to cut at the next meeting.
But he emphasized that no decision has been made about what to do at the next meeting.
- Jim Patterson
The Fed is waiting to see where tariffs settle
When asked if the Fed had enough information about the possible impact of tariffs now that a few trade negotiations have settled in the last week, Powell acknowledged "it's been a very dynamic time for these trade negotiations" but affirmed "we're still a ways away from seeing where things settle down."
"We are learning more and more. It doesn't feel like we're at the end of that process, and it's not for us to judge. It feels like there's much more to judge for us looking ahead," he said.
- David Payne
Powell talks about how tariffs are impacting consumer prices
Asked about the impact of new tariffs on consumer prices, Powell emphasized that it will take a long time to understand how that process will work. So far, he noted, importers are absorbing most of the costs and trying to avoid passing along price increases to consumers.
But he also said that companies have indicated that they intend to do that over time, if they can raise their prices without hurting their sales. Absent this puzzle, Powell said the Fed might well be cutting interest rates by now.
Instead, they need to see more data on how fast and how much retail prices rise due to tariffs, which calls for being cautious about cutting rates.
- David Payne
Powell on the 'big, beautiful' bill
Powell said he does not see the so-called "big, beautiful bill" that passed earlier this month as particularly stimulative.
He emphasized that the government's fiscal impact is not part of their mandate, so he won't oppose deficit spending or lower rates to save the government money.
- David Payne
Stocks edge lower as Powell speaks
The main equity indexes have all moved cautiously lower amid Fed Chair Powell's press conference.
At last check, the Dow Jones Industrial Average is down 0.5%, the S&P 500 is off 0.3%, and the Nasdaq Composite is down 0.1%.
Bond yields keep climbing, though. The yield on the 2-year note was last seen up 5.9 basis points at 3.934% and the yield on the 10-year Treasury is 4.8 basis points higher at 4.376%.
What it will take for the Fed to lower rates?
Reporters were eager to hear from Powell what specific economic data could trigger the Fed to cut interest rates.
Powell wouldn't give any specific triggers, but emphasized that what he and his colleagues need to see is a better balance of its twin mandate, which is to maximize employment and hold inflation near 2%.
Right now, inflation remains above target, while the unemployment rate is very low. Reading between the lines, it sounds like Powell wants a combination of lower inflation and signs of weakening in the labor market to justify a rate cut.
- Jim Patterson
Powell says the consumer is still in good shape
Judging by recent trends in consumer spending and credit card data, Powell said he thinks the American consumer is still in good shape, overall.
Spending has slowed recently, but from very high levels in recent years, which doesn't appear to worry him.
The health of the consumer depends heavily on the labor market, where Powell sees hiring decreasing but unemployment continuing at a low level. This bears close watching, he noted, but for now, there is no obvious sign of trouble for the labor market. And that should keep household finances reasonably sound.
- David Payne
Powell asked about staying on the board of governors after his term is up
Powell was asked if he had any updates on plans to remain on the FOMC's board of governors once his term as chair is up next May.
"Sorry, I do not have any update for you," Powell said.
The Fed will remain data-dependent in the lead-up to September
"We're going to need to see the data, and it can go in many different directions," Powell said, when pressed for what specific data points could prompt a rate cut in September.
There will be two more jobs reports and two more inflation reports between now and that next Fed meeting, which suggests that investors will have a lot of tea leaves to read as they try to guess what Powell and his colleagues will do in September.
- Jim Patterson
September rate cut expectations fall after FOMC meeting today
What are the odds the Fed will cut rates in September? Lower than they were yesterday, according to CME FedWatch.
The tool, which tracks the probabilities of changes to interest rates as implied by 30-day fed funds futures prices, currently shows the chance of a September rate cut at 47.1%, down from 63.3% yesterday and 75.4% one month ago.
The odds the Fed keeps rates steady at its next meeting jumped to 51.9% Wednesday from 35.4% on Tuesday and 5.3% one month ago.
Futures traders have instead shifted rate-cut expectations to the Fed's late-October meeting.
- Karee Venema
More experts weigh in after the July Fed meeting
"Despite the hawkish tinge to some of Powell’s comments, I don't think the mindset of most committee members has changed. This is still a data-dependent Fed, and we expect the data to tell them to deliver a cut later this year as unemployment rises modestly and services inflation continues to cool. The expectation for this meeting wasn't a rate cut, and I don't think there would have been much upside to Powell signaling that one was imminent." – Elyse Ausenbaugh, Head of Investment Strategy at J.P. Morgan Wealth Management
"Given that the FOMC is taking August off, Fed officials will have two more months' worth of jobs and CPI reports to digest before it must make its next decision in September. If the Fed judges that tariffs are not having a material impact on inflation and the labor market begins to weaken, this may be the catalyst for rate cuts beginning this fall. However, if inflation starts to pick up, the Fed may opt to remain on hold in an effort to maintain price stability." – Jason Pride, Chief of Investment Strategy and Research at Glenmede
"For crypto, a Fed pivot could serve as a major tailwind. Looser financial conditions and rate cuts have historically fueled risk assets like bitcoin – which has long acted as a sponge for excess liquidity. Bitcoin has tracked global M2 [money supply] with a 2-3 month lag almost to the tick. With cuts likely on the horizon, bitcoin could continue to grind higher, potentially breaking through the $150K mark by year-end and setting its sights on the psychological $200K level." – Matt Mena, Crypto Research Strategist at 21Shares
"To some extent, these dissents [from Governors Waller and Bowman] reflect political jockeying, as Jerome Powell's term as Chair comes to an end next spring. But, we suspect the dissents reflect at least some genuine disagreement among Committee participants as they grapple with the appropriate stance of monetary policy amid the stagflationary impulse from higher tariffs." – Sarah House, Senior Economist at Wells Fargo Economics
- Karee Venema
Markets are mixed on Fed Day
All three main U.S. equity indexes fell from intraday highs to intraday lows as Fed Chair Jerome Powell repeated, underscored, and emphasized the central bank's wait-and-see approach to evaluating the impact of tariffs on inflation and employment.
A hawkish tone from the Fed chair following a better-than-expected GDP report led investors, traders and speculators to pull back their bets on a September rate cut too.
But the Nasdaq Composite caught a late bid and closed up 0.15% at 21,129.67, within 0.23% of the all-time closing high it reached Monday. The tech-heavy index traded up to 21,303.96 intraday Tuesday.
And it looks like strong post-closing-bell earnings reports from Microsoft (MSFT) and Meta Platforms (META) will provide some lift, with MSFT rising more than 7% and META more than 8% early in after-market trading.
Amazon.com (AMZN) and Apple (AAPL) will report earnings after Thursday's closing bell; AMZN was up 2.2% but AAPL was down 0.5% in the after-market.
The S&P 500 was down 0.12% Wednesday to 6,362.90, while the Dow Jones Industrial Average was off 0.38% to 44,461.28. Both indexes are within modest one-day moves of new all-time highs.
The 2-year U.S. Treasury yield ticked up to 3.945% from 3.875% Tuesday. The 10-year yield was at 4.368% vs 4.328%, and the 30-year rose to 4.901% from 4.868%.
Federal funds futures pricing now indicates a 54.9% probability the Fed will hold the target range for its benchmark interest rate at 4.25% to 4.50% following its September meeting, up from 35.4% Tuesday.
– David Dittman
