July Fed Meeting Recap: FOMC keeps rates steady, while Powell says a September cut is uncertain

Today’s eventful Fed meeting has now concluded. Here’s what we learned today: 

• Calls for the Fed to cut rates are growing — from within. For the first time since 1993, two Fed governors cast dissenting votes, disagreeing with the rate-setting committee’s choice to leave borrowing costs alone and instead preferring to cut rates by a quarter of a percentage point. 
• Powell suggested that Fed officials don’t think tariffs will lead to a persistent inflation problem, like what happened during the pandemic — “a reasonable base case is that the effects on inflation could be short-lived,” he said — but he also said Fed officials aren’t ready to make that call yet. 
• Powell stopped short of suggesting a September rate cut was a done deal. Officials will be watching incoming data, and the majority still think it’s appropriate to use interest rates to reel in economic growth, he said.
  

If you’d like to keep following the latest developments from the Fed and what they could mean for your money, visit us at Bankrate.com.

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The S&P 500 and Nasdaq both drop – mildly – in the last 90 minutes of trading

• After continuing the day’s uptrend for the first half-hour following the Fed announcement, the S&P 500 and Nasdaq both reversed course – a head fake to end the day.
• But as we’ve seen for recent market moves, volatility was low. The S&P 500 ended the day down 0.12%, while the Nasdaq was up 0.15%, but slightly off its highest levels of the day.
• Investors are already looking ahead to a potential rate cut in September, an expectation that could help the market continue to rise until then.

After the market uptrend of the last three months, it’s worth remembering that stocks tend to do well in the year after the Fed’s first rate cut.

In its statement, the Fed tweaked its economic assessment, now saying growth has ‘moderated’ as opposed to the characterization of economic activity expanding ‘at a solid pace’ as noted last month. That one seems to have been inserted after this morning’s release of the initial GDP report for the second quarter, which showed a softening in consumer spending and business investment. 

Otherwise it was largely a copy-and-paste from June.

Interest rates are high and are unlikely to come down quickly. Consumers should lean into this by aggressively paying down high-cost debt and padding emergency savings. Those with less debt and more savings will be best positioned to weather whatever the economy throws at us in the months ahead.

Powell says the timing needs to be right

Watching for a possible interest rate move, in this case a reduction, is a little like taking an old-fashioned road trip. The question among the kids in the back is, “Are we there yet”?

It is much the same for observers wondering what it will take for the Federal Reserve to cut interest rates.

Powell told reporters, “We’re trying to get that timing right”, noting the risks of cutting too soon and cutting too late. Powell suggested there is a case to be made that tariffs will result in a so-called one-time price adjustment, not a persistent kind of damaging inflation. If incoming inflation data doesn’t come in hotter than expected, then a rate cut is a possibility, but not yet a sure thing.

Powell said retailers so far are eating most of the cost of tariffs, accepting lower profit margins as a result. That could change in the future, he said, and already it appears that retailers are passing some of those import costs along to consumers.

“It’s starting to show up in consumer prices. We expect to see more of that,” Powell said. “They may be less than people estimate or more than people estimate. They’re not going to be zero. Consumers will pay some of this. Businesses will pay some of this. Retailers will pay some of this. We’re just going to have to see it through.”

The best personal loan rates go to borrowers who have the highest credit scores and the capacity to repay debt the fastest. Fair or not, that’s the reality — and no announcement from the Fed will change it.

But at least we know the recipe for nabbing the lowest possible APR:

• Practicing good financial hygiene is a good way to start. Monitor your credit closely, for instance,  to track your credit score. Then you can borrow when you hit a peak.
• It’s also wise to update your budget on a continuous basis. This helps you to prepare for eventual personal loan repayment. Again, the lowest rates go to borrowers who choose the shortest repayment terms — say, three years or less, not four years or more.

Taking these steps can help you get the most cost-effective loan, even if you have plenty of other personal loan questions amid our economic uncertainty.

Powell has refrained from suggesting that the Fed cutting in September is an absolute certainty.  

“We have made no decisions about September,” he said. “It seems to me, and to almost the whole committee, that the economy is not performing as though a restrictive policy is holding it back inappropriately.” 

It seems like they’re keeping their options open – and planning to let the data that’s released between now and their September meeting do the talking.

Powell, who has stayed tight-lipped about politics and the president’s comments in his years leading the Fed, was brief but pointed in his remarks just now on Fed independence.

“Having an independent central bank has been an institutional arrangement that has served the public well, and as long as it serves the public well, it should be continued and well respected,” he said. “If it didn’t serve the public well, it wouldn’t be something we would automatically defend.”

He adds that the Fed’s independence allows policymakers the opportunity to focus on economic data and achieving its two goals: stable prices and maximum employment. 

“If you were not to have that, it would be a great temptation to use interest rates to affect elections, and that’s something that we don’t want to do.” 

Trump has, so far, not yet publicly commented on the Fed’s decision.

It seems like today’s dissents got policymakers thinking more carefully. 

“What you want when someone dissents is “a clear explanation for what you’re thinking and the argument you’re making. We had that today,” Powell said at the Fed’s post-meeting press conference. “This was quite a good meeting. All around the table, people thought carefully today about this.”

In the end, Fed Gov. Christopher Waller wasn’t able to persuade the committee to cut rates. The majority of the FOMC still viewed inflation as being above target, Powell said. But there might be some things that he’s already gotten the committee to see differently. Last month, Powell repeatedly described the labor market as solid and resilient. Today, he’s mentioned multiple times now that there are downside risks. 

It reminds me of what Esther George told me about dissents: They’re uncomfortable, but they ensure policymakers are seeing an issue from every angle.

One of my favorite things to do each time we get a Fed decision is compare post-meeting statements. Fed officials take these read-outs very seriously: They’re seen as the official way of signaling Fed watchers which way they committee is leaning, representing the consensus view of the full committee. 

Here’s the one key change: “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.”

Last month, policymakers described the economy as growing “at a solid pace.” 

It’s a clear downgrade and does send a clear signal about downside risks — but it also stops short of clearly signaling that a rate cut in September is imminent.

Investors yawn after the central bank stands pat on rates

• After a Fed announcement, stocks often bounce around, doing a fake and sometimes a double fake in the 30-45 minutes after the decision. Not this time out.
• Instead, today the market is keeping it “low volatility” on the widely expected news. Stocks are continuing the mild uptrend they’ve seen most of the day – in keeping with the market’s movement we’ve seen in the last few weeks.
• With the slow-and-steady uptrend, both the S&P 500 and Nasdaq sit right near 52-week and all-time highs. This market just keeps melting up.

Here’s how the Fed’s decision affects stocks, cryptocurrency and other investments. 

The Fed left interest rates unchanged, but it wasn’t unanimous, as we saw two votes for a rate cut today – the first ‘double dissent’ by Fed governors in nearly 32 years. This will only add to the scrutiny and second-guessing of anything the Jerome Powell-led Federal Reserve says, does, or doesn’t do.

There is no assurance of interest rate cuts resuming in September. But with two rounds of employment and inflation data on tap between now and then, the Fed will have plenty of data on which to decide.

It’s a good time to be a saver, but not so much if you’re a borrower 

The Fed can be confusing, but the mechanics work like this: The Fed sets its key interest rate, then other borrowing costs and savings yields across the economy move in lockstep. No move today means the interest rates that Americans pay to finance anything from a car to a home renovation will stay steady. 

Meanwhile, savers who’ve parked their cash in a high-yield savings account will continue benefiting from inflation-beating returns — and yields holding at levels previously not seen for over a decade.

Wondering what to make of the Fed’s latest announcement? Here’s a breakdown of what it means for every aspect of your personal finances.

Savers: Yields on savings accounts and certificates of deposit (CDs) are unlikely to budge much in coming weeks — unless the Fed begins strongly signaling that they’re about to start cutting rates again. Banks can adjust their offerings at any time, unless your cash is locked in a certificate of deposit (CD) with a fixed yield. 

Borrowers: Borrowing costs will stay high, and so will credit card rates. If you’re carrying a balance, consider opening a balance-transfer card with a 0 percent introductory annual percentage rate (APR) or working with a counselor. And if you think you might need to finance a big-ticket purchase this year at a historically pricey rate, keep a close watch on your credit score. 

Homeowners and homebuyers: The ultimate question is whether rate cuts from the Fed can help bring down mortgage rates. The 30-year fixed-rate mortgage more closely tracks the 10-year Treasury yield, which has risen as investors process fears of hotter inflation from tariffs and ballooning government debt. That helps explain why mortgage rates have actually increased since the Fed began cutting borrowing costs in September — and why housing economists predict that mortgage rates could remain above 6.5 percent for the rest of this year.

Investors: Markets have brushed off economic worries so far, with the S&P 500 and Nasdaq flirting with record highs. But even if sentiment shifts quickly, long-term, diversified investors should stay the course and avoid overreacting to short-term moves.

Officials still seem to be more worried about cutting rates too quickly

The Fed’s decision is in: Officials didn’t cut borrowing costs. The news means their key benchmark borrowing rate will stay in a target range of 4.25-4.5 percent. 

Officials are juggling two risks: cutting rates too early and fueling more inflation versus cutting borrowing costs too late and slowing down the economy. For right now, with high-level data suggesting that the economy and the job market are holding up, Fed officials seem to be signaling that the former outweighs the latter. 

Stay tuned for more updates as we parse through the announcement. 

APYs remain elevated during the Fed’s holding pattern

The biggest winners in personal finance this year are anyone with money in a high-yield savings account. Competitive annual percentage yields (APYs) are currently seven times greater than the national average APY — and they’re well above the rate of inflation. Plus, they’re likely to remain stable for now, thanks to the continued Fed rate pause.

For perspective, $10,000 that earns the best high-yield savings account APY of 4.30 percent would generate around $430 in interest in one year. Meanwhile, $10,000 in an account earning the national average (currently around 0.56 percent APY) would earn just $56 in interest. Based on this example, settling for an average yield is like leaving $374 in free money on the table. (Keep in mind savings account rates are generally variable, meaning banks can choose to change them any time).

If you’re leaving $374 on the table in extra interest in a year, this comes out to $31 per month. Some people might say $31 isn’t worth their time. But consider this: If a restaurant charged you $31 for an entrée you didn’t purchase, you’d likely ask for your bill to be corrected. Ultimately, it pays to act as if every dollar counts, because it truly does when you’re trying to achieve your financial goals. 

The S&P 500 has been on a tear since its low point following the April 2nd tariffs

• Stocks have been rising relentlessly since they plunged in the wake of President Trump’s tariff announcements on April 2 – yet many of the same risks remain and new ones have emerged. 
• The market’s valuation, as measured by metrics such as the price-earnings (P/E) ratio, are among the highest levels ever, meaning stocks seemed to be priced for perfection.
• Inflation has been creeping up month by month recently, however, as Trump’s tariffs begin to percolate through the economy. Other indicators such as reports from purchasing managers indicated that more substantial inflation is on the way. 

Here are 5 key signs to watch for a stock-market bubble – and where we see them today.

In the last several years, mortgage rates took homebuyers on a wild ride. Beginning of the pandemic? The Fed slashed its benchmark interest rate and mortgage rates plunged to historic lows, bottoming out under 3 percent. The inflation days of 2022 and 2023? The Fed raised its rate and mortgage rates soared, peaking at 8 percent.

More recently, though, the roller coaster has offered few thrills. Since late February 2025, the average 30-year fixed mortgage rate in Bankrate’s weekly survey has trended no higher than 6.95 percent and no lower than 6.67 percent.

That tighter range has been reflected in our weekly Mortgage Rates Variability Index, which looks at the uniformity of Bankrate’s rate offers. For the past month, those readings have been largely stable, with less variability in rates lender to lender.

There seems to be not much change on the horizon, either, especially if the Fed continues to hold as-is. The current consensus among housing economists is that 30-year mortgage rates could remain above 6.5 percent for the rest of this year.

Card issuers seem to feel better about the economy and opportunities for growth

Consumers say they’re still gloomy about the economy, according to the University of Michigan’s Index of Consumer Sentiment and other “soft” data trackers. But the “hard” data —  actual stats on employment, economic growth and consumer spending — doesn’t mirror that sentiment. Travel demand is more resilient than many expected, bar and restaurant sales are strong and June retail sales exceeded expectations. And the 4.1 percent unemployment rate is still low in historical context. Even credit card delinquencies have leveled off.

There appears to be growing optimism among banks that the worst is behind us, and they’re looking to grow again. In addition to strong economic numbers lately, the still high interest rates provide banks plenty of revenue and incentive to keep bringing in new cardholders with flashy offers.

In late June, Chase announced a major refresh of its popular luxury travel card, the Chase Sapphire Reserve®. Its chief rival, American Express, nearly simultaneously announced upcoming enhancements to The Platinum Card® from American Express. And earlier this week, Citi threw its hat into the premium card ring with the introduction of the Citi Strata Elite℠ Card. This spring and summer, we also saw a variety of elevated introductory bonuses on airline, hotel and general-purpose travel cards.

Credit card account openings peaked in 2022 at 82.1 million, according to Equifax. Originations fell 4.3 percent in 2023 and dropped a steeper 9.7 percent last year as delinquencies spiked and recession worries loomed. Through the first four months of the year, 2025 was on pace for another decline (albeit a smaller one), but that could change as banks ramp up the incentives for new cardholders.

“The US consumer is in a great place here,” Capital One Chairman and CEO Richard Fairbank explained during the company’s recent earnings call. “The unemployment rate remains low and stable, job creation remains healthy. Real wages are, of course, growing steadily. Consumer debt servicing burdens remain stable and near pre-pandemic levels.”

Not everything is peachy, of course, and there’s plenty of economic uncertainty to go around. Financial inequality plays a role in all of this as well. If you’re among the nearly half of credit cardholders who carry debt from month to month, you’re still facing near-record credit card interest rates and an uphill battle to climb out of that hole. But if you have a healthy income and credit score and are able to pay your credit cards in full, you’re a great candidate for a rewards credit card. And many of these cards are becoming even more rewarding. 

Here’s where we’re starting to see the evidence

The impact of recent tariff hikes started to appear in the latest data on consumer prices from the Bureau of Labor Statistics. Up until this point, inflation had been weaker than expected, arming Trump and his allies with ammunition to question the Fed’s decision to keep interest rates unchanged.

Here’s where we’re seeing tariffs affect prices so far:

• Household furnishings and supplies: up 1 percent between May and June, after a 0.3 percent increase in the prior month. 
• Appliances: up 1.9 percent last month, after a 0.8 percent increase in May.
• Apparel: Up 0.4 percent over the past month, after declining 0.4 percent in May and 0.2 percent in June 

While the Fed is expected to hold rates steady today, the bigger question is what officials might signal about their next meeting in September. Bankrate’s Greg McBride, CFA, spoke with ABC News this morning about what signs in the economy the Fed will be watching and what Americans can do while they wait for a potential rate cut.

“The question is, ‘You have to skate to where the puck is going to be. Where is the economic puck going to be in a few months?’” he said.

Investors need to be prepared, however the dust settles

• President Trump has been attacking Fed chair Jerome Powell publicly for months calling on him to resign, though it’s investors who may be the biggest losers from the fight.
• At issue is the Fed’s independence from political oversight, which helps it set appropriate monetary policy without being beholden to politicians’ short-term decision-making. 
• Investors shouldn’t panic, and they should consider their goals – do they need the money soon or can they allow it to ride through potential volatility? 
• Investors with more experience may consider safe-haven investments or other sectors of the market that may weather a storm better than U.S.-only investments. 

The market has been slowly melting up in recent weeks, with low volatility

• Stocks were up slightly in early trading, as investors anticipate the Fed to hold steady on rates at today’s meeting. Investors are looking beyond today for signs that the central bank is changing its posture and might lower rates at the next meeting in September. 
• Stocks have been on a tear since the market meltdown due to Trump tariffs in April. But recently the market has had a string of low-volatility days, with stocks nonetheless rising.
• After weeks of melt-up, the S&P 500 and Nasdaq stock indexes are right near all-time highs – and they’re priced among the highest price-earnings (P/E) valuations of all time.

In Bankrate’s latest survey, market analysts predicted stocks would hit new all-time highs in the coming year.

Here’s what the former Kansas City Fed President thinks consumers should take away from the Fed’s two expected dissents today

Is division something for consumers — or Powell — to fear? That’s a question I recently asked Esther George, former president of the Kansas City Fed. 

George knows what it’s like to be in the minority. She broke from the Fed’s majority at her very first meeting as a voter, and over time, logged 16 dissents — or half the meetings where she had a say in policy. 

“Let me tell you, it is very difficult,” she said. “You have to have the courage to say, ‘I see it differently.’” 

Before FOMC meetings, she’d practice debating her stance internally with her team, her way of making sure she saw an issue from every side. Sometimes, she’d go in with a preconceived idea, only to change her view after discussing it with her colleagues on the FOMC. 

She described one of her most high-profile dissents — in June of 2022, when she voted against the Fed’s decision to hike rates by a surprise three-quarters of a percentage point — as a “game-time” decision. It caught many of her colleagues by surprise, she said. 

“It is a public responsibility, an oath you have to the public to say, ‘I’ll be honest about the views that I see,’” George said. “These disagreements and different views are so important to the decision-making process. That’s why you have 12 votes around the table.” 

Here’s what it could mean for Trump’s ongoing battle with Powell

Powell has taken much of the heat from President Donald Trump, but he’s not the only Fed official believing the U.S. central bank should leave interest rates alone. At Federal Open Market Committee (FOMC) meetings, 12 officials get a vote on interest rates. A simple majority wins. And so far, officials have unanimously voted to keep their borrowing benchmark at a level that hadn’t been previously seen for over a decade. 

That could change this month. Vice Chair for Supervision Michelle Bowman and Fed Governor Christopher Waller are expected to dissent against the rest of the committee, preferring to lower interest rates as a way to shore up the labor market — which has clearly been losing steam. We know this because they’ve said in their public remarks leading up to the Fed’s July meeting that they’d favor lowering rates.

Dissents are rare. There have been 211 rate-setting meetings since the year 2000. Dissents have occurred at only a third (or 73) of them, a Bankrate analysis of St. Louis Fed data shows. 

It’s even more unusual for Fed governors to dissent. Only four Fed governors have dissented since 2000, compared with 89 dissents from the regional reserve bank presidents (at 15 meetings, there have been more than one dissent). The last time two Fed officials dissented was in 1993. 

Fed historians often argue that regional reserve bank presidents dissent more because they’re influenced by their unique regional economies — and also because Fed governors, who work closely with the chair, don’t want to signal a lack of confidence in the head of the FOMC. 

Back in the 1980s, for example, Fed Chair Paul Volcker almost ended up resigning after four of the seven governors on the board ambushed him with a private vote to cut interest rates at a meeting that was previously not meant for discussing borrowing costs. A recent video of mine broke down this piece of central banking history and its eerie similarities to today:

But the circumstances today are still a little bit different. There’s legitimate reasons for both cutting rates and leaving them alone, experts tell me, and policymakers always tend to read the data differently during turning points. Trump, meanwhile, thinks the Fed should cut interest rates because the economy is strong — while Waller and Bowman argue that the U.S. central bank should cut borrowing costs because the financial system is weaker than it currently looks. 

Yet, all of this illustrates a tricky communication challenge. The Fed’s mandate is to set interest rates independent from politics, but U.S. central bankers’ decisions are increasingly being viewed through a political lens amid Trump’s feud with Powell.

With Trump demanding rate cuts but inflation now heating up from tariffs, the central bank is facing a test of its independence

• President Donald Trump’s attacks on Fed Chair Jerome Powell and the U.S. central bank are growing louder, with the chief executive making it clear he thinks the Fed should cut interest rates. Officials, however, are not expected to follow through, keeping the key borrowing benchmark that influences how much you pay to finance big-ticket purchases at a decade-plus high for another month. 
• The Fed itself is growing increasingly divided over its next steps. For the first time in over 30 years, two Fed governors — the officials who are closest to the chair — are expected to dissent against today’s decision to keep rates steady. Those high-profile dissents could give off the impression that officials are losing confidence in Powell, though experts interviewed by Bankrate say it’s more a reflection of a clear turning point for monetary policy.
• Tariffs are starting to push up inflation the way economists warned they would. Last month, inflation rose 2.7 percent, the highest since February, as many of the items that are typically imported (appliances, furniture, toys, furnishings and more) rose by the fastest pace in years. Back in April, inflation was just 2.3 percent, within an arm’s length of the U.S. central bank’s 2 percent target. 
• Some Fed officials still think they’ll be able to cut interest rates this year, and investors expect that the Fed will next cut interest rates in September, according to CME Group’s FedWatch tool. Any clues Powell offers about the future will be closely scrutinized by consumers, financial markets and the president alike. 
• Fed officials say they would look past tariff-driven inflation if it’s not leading to broader, sustained price pressures. But knowing that takes time, and it can also be a tough or ambiguous call. The Fed is expected to be debating what evidence could give them the confidence to cut — and whether it’s worth the economic risks to keep rates high while they wait.

Tariffs have officials cautious about cutting rates too soon, but some Fed officials say ‘you can’t wait forever’ to cut

The Fed is not expected to cut interest rates today. Simply put, officials don’t think they can let up on the brakes because inflation is still above their target — and tariffs could make it worse. 

But one official, San Francisco Fed President Mary Daly, put the Fed’s current challenge best: “One of the ways you can make a policy mistake is to wait for something to materialize that doesn’t. Waiting for inflation to rise or become persistent could leave us behind,” she said in public remarks from early July. Fed watchers will be looking for any hints from Fed Chair Jerome Powell about whether the Fed could get back to cutting interest rates in the fall. 

Today’s decision, though, is unlikely to heal the tension between Powell and President Donald Trump, who has publicly berated the chief central banker for not cutting interest rates this year. 

Here’s the schedule of events for today: 

• At 2 p.m. ET, the Federal Open Market Committee (FOMC) will announce its next interest rate decision.
• At 2:30 p.m., Fed Chair Jerome Powell will take questions from reporters (including us at Bankrate!) at a press conference in Washington, D.C. 

Check back for updates throughout the day, as we break down what you need to know ahead of the Fed’s announcement — and help you understand what it means for you.