FOMC minutes from July 29–30 meeting showed that while two members, Governor Christopher Waller and Michelle Bowman, dissented in favor of a rate cut, they remained isolated within the Committee. “Almost all participants” judged it appropriate to keep the federal funds rate at 4.25%–4.50%, highlighting the broad consensus to hold steady amid uncertainty.
The discussion revealed a split in emphasis: most officials still see upside inflation risks as “the greater of these two risks”, particularly given tariffs and the risk of unanchored expectations. But a couple of members warned that weakening employment should not be underestimated, reflecting the growing tension between Fed’s dual mandate.
The minutes flagged “considerable uncertainty” over the timing and scale of tariff effects, leaving policymakers braced for potential tradeoffs if inflation proves sticky while labor market softens. Rate decisions, thus, would depend on “each variable’s distance from the Committee’s goal and the potentially different time horizons over which those respective gaps would be anticipated to close.”
