Yeliz Akmaca 
Donald Trump called for a rate cut ahead of the FOMC meeting on July 29-30. Speaking at a press conference in Scotland, Trump said the Federal Reserve (Fed) should lower interest rates. He noted the economy is strong but emphasized that a rate cut would further boost growth.
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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