Fed's reticence on rate cuts forces market to rethink outlook

Reuters ^ | July 30, 20257:17 PM CDT | Saqib Iqbal Ahmed and Davide Barbuscia

[E. Pluribus Unum]

Summary

• Traders back away from bets on interest rate cut in September
• Treasury yields and the dollar rise, while stocks retreat
• Positioning ahead of Fed decision may have amplified bond reaction
• Investors warn against reading too much into one-day market reaction

NEW YORK, July 30 (Reuters) - The Federal Reserve's decision to avoid signaling imminent rate cuts despite relentless political pressure underscores its prevailing caution and has forced investors to dial back expectations for an easing at the next policy meeting.

The Federal Open Market Committee held interest rates on Wednesday in a split decision that gave little indication of when borrowing costs might be lowered. It also drew dissent from two Fed governors, both appointees of President Donald Trump who agree with him that monetary policy is too tight.

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The overnight policy rate controlled by the Fed remains in a 4.25%-4.50% range. The last rate cut was in December and the Fed hiked rates from March 2022 to July 2023 to fight inflation.

The lack of a clear signal that the Fed was warming to interest rate cuts as soon as the next meeting in September lifted Treasury yields and the dollar in late trade and turned stocks lower.

"I think the Fed has pushed out the probability of a rate cut," Sonu Varghese, global macro strategist at Carson Group.

"They're going to wait for more data, but more data means more time, and more time means rates are going to remain restrictive for a few more months," Varghese said.

Fed funds futures traders are pricing in a 46% probability of a rate cut by September, down from about 65% a day ago, according to the CME Group's FedWatch Tool...

[Paladin2]

The Fed Inflation Target should be 0.10%.

Powell has TDS.

Passbook Savings should be paid @ 3% above one’s personal, experienced Inflation.

[lightman]

The IRS should tax only interest paid in excess of the rate of inflation.

[frank ballenger]

It’s all so zen like and simple.

A traitorous group hates America.

Powell is obsessed with irrational hatred of Trump.

He will sacrifice the economy and dreams of Americans in order to make the GOP look bad for the midterms next year.

I want him brought to justice.

[Paladin2]

Capital gains asset basis needs to be adjusted for personal inflation.

[FlingWingFlyer]

Saquib and Davide.

[RainMan]

Time to take away the Feds ability to charge interest to the government

[Bonemaker]

“Powell is obsessed with irrational hatred of Trump.”

And to think Trump appointed the prick.

[Bshaw]

The Fed met jointly today with the FOMC, which is subject to sunshine laws on meeting, meaning they must be public.

The Fed is not covered under such sunshine laws, yet a Federal judge not only allowed today’s meeting to be held in secret, by ensured it with a judicial order.

There should be FOIA request issued and then a suit filed promptly to obtain the minutes and any transcriptions, as is required of the FOMC - by law!.

[lightman]

Bingo.

The tax code has incentivized inflation.

[Paladin2]

It seems to be that Inflation is a yuge part of the only path to cut the US Debt.

Sad, but true.

[libertylover]

I’ll confess that I’m not market savvy. Is the freeze being done to keep Trump from having more victories?

[lightman]

Wrong...inflation fuels the addiction to out of control government spending.

[E. Pluribus Unum]

Is the freeze being done to keep Trump from having more victories?

Yep. The same banker-industrial complex lowered the rates for Europe.

[Owen]

PCE due out tomorrow morning. Projections are higher.

Core is within spitting distance of 3%. Which doesn’t matter much. What matters is trend, and this month’s CPI reversed to start climbing, with PCE projected the same. This is not the direction of inflation that induces rate cuts.

What one can safely do is ignore all after the word “as” when reports say “Inflation turned up this month as Trump’s tariffs finally show in consumer prices”.

Inflation can rise. It doesn’t have to have anything to do with tariffs.

[Paladin2]

You’ll have to explain your assertion.

I don’y find our assertions to be mutually exclusive.

[Seaplaner]

Note to Reuters editors about an elementary definition...

"Reticence" does not mean "reluctance".

Reticence means keeping silent, or reluctance to speak.

Most editors and many news reporters know this.

[lightman]

The assertions are not mutually exclusive.

The tax code is rigged to make the government “profit” from inflation.

Whether those “profits” are spent on reducing the deficit or on expanding federal programs is up to Congress.

Hint: It will be the latter.

[TexasGator]

“”Reticence” does not mean “reluctance”.”

Reticence

Synonym: Reluctance

[Bratch]

Jerome Powell and Board of Governors Keep Interest Rates Unchanged – FED GOAL, to Create a Debt Spiral

July 30, 2025 | Sundance

Now you will see why I said to watch this interview without distractions.

FED Chairman Jerome Powell announced today the FED Board of Governors is keeping the interest rate at 4.25 to 4.5 percent.   The Central Bank of the United States is trying to create an unsustainable debt spiral.

The goal of the FED (Central Bank) is to create a debt spiral that leads to a crisis. This is the way the Central Bank controls the activity of the smaller banks.  This is the way the Central Bank keeps control over the people in America.  

WATCH:

Fed Chair Powell on unchanged rate: Monetary policy sets us up to respond quickly

Don’t pretend. Stop being a battered victim to an abusive relationship with government.

President Trump is pumping money into the USA economy through economic growth, tariff revenue, federal govt downsizing, expanded private sector employment and wage growth.

The Central Bankers are trying to drain money from the USA economy through monetary policy and control over the behavior of the smaller regional banks and credit unions.

♦ FED. The Central Bank controls interest rates.

♦ FED. The Central Bank (FED) does not control inflation.

♦ BIG BANKS. The credit creation by institutional banks, the creation of money, does create inflation.

♦ BIG BANKS. Money created by institutional banks does not come from the FED.

♦ BIG BANKS. Money created by institutional banks, via credit creation for asset purchases, creates inflation.

♦ BIG BANKS. Money created by institutional banks via credit creation for consumer spending (loans and credit cards), creates inflation.

♦ TRUMP. Money created by regional banks via credit creation for Main Street development, expands GDP, creates revenue and does not create inflation.  Additionally, money created by tariff incomes and money delivered by foreign entities to the U.S. treasury for tariff offset purchases, do not create inflation.

THE BATTLE

The FED, representing the USA Central Bank and the interests of the BIG BANKS, are trying to create a massive debt spiral by keeping the interest rates high and making service on the debt unsustainable.

President Trump, representing Main Street USA, is fighting against the interests of the BIG BANKS, and trying to create revenue to avoid the debt spiral the FED is trying to create.

That’s the non-pretending reality of the situation.

Why does the FED (Central Bank) want to create a debt spiral?  Because they want control over the economic activity, which includes the destruction of the smaller regional banks and credit unions who are funding the Main Street economy.

The Cental Bank wants full control.

What the U.S. Marshalls are to the Judicial Branch; the FBI is to the DC system, and the CIA are to the bankers.