Fed keeps rates unchanged — but two vote against ‘wait-and-see’ approach

The Federal Reserve kept interest rates unchanged Wednesday despite intense pressure from President Trump — and votes by two of the central bank’s governors against Jerome Powell’s “wait and see” approach..

The central bank’s policy-setting Federal Open Market Committee maintained the benchmark rate between 4.25% and 4.5%, where it has been since December.

It marked the first meeting in three decades where more than one governor has dissented on an interest-rate vote.

In its policy note, the Fed said: “Uncertainty about the economic outlook remains elevated.” That erased a phrase from the previous note that uncertainty had “diminished.”

Governors Christopher Waller and Michelle Bowman voted in favor of immediately slashing rates, adding to growing pushback against Chairman Jerome Powell’s reluctance to slash rates over fears that Trump’s tariffs will ignite inflation this fall.

Powell has faced unprecedented heat from Trump, who has publicly called the policymaker “stupid,” “hardheaded” and a “numbskull” as he pushes for interest rates to be slashed as much as three percentage points.

Last Friday, Trump had said he believed Powell was ready to start lowering rates after he joined the central banker in matching hard hats for a tour of the Fed’s controversial $2.5 billion renovation project at its headquarters.

Fed officials, meanwhile, have split over the past few months on when to cut interest rates – and whether to do so altogether.

While Waller and Bowman have sided with Trump, San Francisco Fed President Mary Daly has said she wants to see at least two more months of economic data before slashing rates, teeing up for a cut in September.

Others like the Atlanta Fed’s Raphael Bostic have remained cautious over fears that tariffs could reheat inflation this summer.

Powell in May warned of an increased risk of stagflation, which is higher inflation and a slowdown in economic growth.

Inflation has not been as much of a worry as officials and economists initially feared since the president temporarily lowered many rates during negotiations.

This is a developing story. Please check back for updates.