The Fed report

highlights from The FOMC Policy Update
JULY 31, 2025

This week, the Federal Open Market Committee (FOMC) released its statement and held a press conference following the conclusion of its July meeting.

FOMC Policy Updates: Key Highlights

As generally expected, the FOMC maintained the target range for the federal funds rate at 4.25-4.50%.
The decision was not unanimous, as two Fed officials voted to lower the target range by 25 basis points.
The Fed’s policy statement was largely consistent with the June press release, once again noting that inflation remains “somewhat elevated” and that uncertainty about the economic outlook “remains elevated.”
The market is now pricing in one quarter-point rate cut and a roughly 50% probability of an additional cut by the December meeting, compared to two cuts expected previously.

notable commentary

Despite continued elevated uncertainty, Chair Powell noted that the economy is in a relatively solid position: the unemployment rate remains low, the labor market is near maximum employment, and, though it remains somewhat above the Fed’s 2% long-term objective, inflation has eased significantly from its highs.
While several trade deals between the U.S. and its trading partners have been reached in recent weeks, tariff and trade negotiations are dynamic, and the Fed remains keenly focused on keeping long-term inflation expectations well-anchored and preventing one-time price level increases from becoming an ongoing inflationary problem.
The Fed views its current policy stance as “modestly restrictive” and appropriate to guard against inflation risks, and the FOMC believes it is well-positioned to assess incoming data over the next several months and adjust monetary policy as needed in response to the evolving balance of risks.
In response to several questions during the press conference, Chair Powell reinforced the importance of maintaining the central bank’s independence from political influence, as it continues to “serve the public well.”

Important Disclosures
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