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Economic growth

Federal Reserve Holds Interest Rates Steady Amid Economic Uncertainty

Strategic Insights

— 1 min read

The Federal Open Market Committee (FOMC) has voted to maintain the interest rate at 4-1/4 to 4-1/2 percent, citing indications that economic growth has moderated in the first half of the year and uncertainty remains elevated. This decision comes as the Atlanta Fed's business contacts throughout the Southeast reported little change in the overall economy since spring, navigating ongoing uncertainty over dimensions ranging from tariffs to geopolitics to regulatory policy.

Key Takeaways:

  • The FOMC voted 9-2-1 to hold interest rates steady, with Governor Adriana D. Kugler absent and not voting.
  • Atlanta Fed president Raphael Bostic stated that the July jobs report, which showed the labor market had slowed more than previously reported, is one of many factors he will consider as he contemplates the appropriate path of monetary policy going forward.
  • Bostic expressed concern over inflation, which was not moving toward the Fed's target of 2 percent, and stated that he will pore over the new jobs report and other incoming data before the September 16-17 FOMC meeting.
  • Bostic hinted at the possibility of revising his stance on rate cuts if the labor market weakens in a sustained way, saying, "If it looks like the labor market is weakening in a sustained way, such that the risks on that side have increased to be greater than risks on the inflation side, then I'd be open to increasing the number of cuts."
  • The FOMC maintained the reduction in the monthly redemption cap on Treasury securities at $5 billion, the rate approved at the March meeting.

Statistics:

  • The FOMC voted 9-2-1 to hold interest rates steady.
  • The interest rate remains at 4-1/4 to 4-1/2 percent.
  • The labor market declined more than previously reported, with wage pressures muted, according to the Atlanta Fed's business contacts.
  • The FOMC maintains the reduction in the monthly redemption cap on Treasury securities at $5 billion.

Sources:

  • CNBC interview with Atlanta Fed president Raphael Bostic on August 1.
  • Federal Reserve Meeting Minutes, July 30.
  • The Beige Book, July 16 edition.
  • Federal Reserve Chair Jerome Powell's press conference following the July 30 FOMC meeting.
  • Atlanta Fed's Business Contacts Survey, July 2025.
  • Federal Reserve's Summary of Economic Projections (SEP), June 18.

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