Targeting Jerome Powell, Trump said, “A smart person would have cut these rates long ago,” thus putting the economy card back on the table for the presidential race. 

Despite this pressure, the Fed remains on course. According to CME FedWatch Tool data, the probability of keeping rates unchanged at the July 30 meeting has reached 96.9%. If this happens, the Fed will have left rates unchanged five times this year. The current rate range would remain at 5.25% – 5.50%. 

Fed’s Cautious Stance Continues 

Jerome Powell and the Committee have made rate decisions throughout the year based on data. They analyze factors such as Trump’s trade policies, high housing costs, and core inflation and are in no rush to change rates. 

BlackRock CIO Rick Rieder said a rate cut would lower housing prices and soften inflation. San Francisco Fed President Mary Daly stated that two rate cuts this year would be reasonable and cautioned that keeping rates too long unchanged could pose risks. 

Market Still Expects Rate Cuts 

According to Polymarket data, the probability of two rate cuts is 38%, a single cut is 23%, and no cuts stand at 20%. Additionally, the market prices in a 10% chance of three cuts this year. 

The Fed will also meet in September, October, and December, so rate cut expectations are not fully dismissed. Jerome Powell’s post-meeting statements will guide investors, and the released meeting minutes will clarify the Fed’s position for the remainder of the year.

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