The Federal Reserve announces to keep the benchmark interest rate unchanged, with dissenting votes from directors Bowman and Waller.

Under strong pressure from President Trump, the Federal Reserve decided on Wednesday to keep the benchmark interest rate unchanged, but there were clear internal divisions with two senior officials casting dissenting votes, calling for an early rate cut. This is the first time since 1993 that multiple Fed officials have expressed dissent in interest rate decision-making. The Federal Open Market Committee, with 9 votes in favor and 2 against, decided to continue maintaining the federal funds rate in the range of 4.25% to 4.5%. The two officials in favor of a rate cut were Michelle Bowman and Christopher Waller, who believed that inflation was under control and the labor market could soon weaken, thus calling for a timely start to a rate-cutting cycle. The meeting statement mentioned that despite fluctuations in net exports affecting overall data, "economic activity in the first half of the year has slowed," while the unemployment rate remains low and the labor market is stable. Inflation is "slightly above target," but has not worsened further. Compared to the June meeting, the Fed's description of uncertainty in the economy has shifted from "easing" to "remaining high," with slightly more cautious wording. Although the market widely expected no rate adjustments at this meeting, investors are highly focused on the September policy direction. Chairman Powell said at a press conference after the meeting, "We haven't made any decisions about the September meeting yet." He emphasized that evaluations will be based on the latest economic data and the impact of trade policies, especially paying attention to the inflationary effects of tariffs. Market expectations for a rate cut in September cooled after Powell's speech. According to the CME "FedWatch Tool," the probability of a 25 basis point rate cut in September decreased from 64% before the meeting to 46%. The June dot plot also shows that there may still be room for two rate cuts this year. Jack McIntyre, portfolio manager at Brandywine Global, pointed out that while dissent from two officials is rare, it was actually expected, with the key disagreement being "when to cut rates," rather than whether to cut rates. He believes that this dissent actually forces Powell to lean more "dovish" in policy. Despite the Fed maintaining political neutrality, President Trump has been pressuring them frequently. He has not only publicly criticized Powell for being "too slow to act," but also considered removing him from office and requested a 300 basis point rate cut to alleviate debt burdens and boost the sluggish real estate market. In addition, the Trump administration has criticized the renovation budget of the Fed's two buildings in Washington getting out of control. However, the Fed has received support from the data. The latest data from the Department of Commerce shows that the annualized GDP growth rate for the second quarter was 3%, well above expectations. Although part of this growth reflects a base effect after a surge in imports in the first quarter, it still shows strong economic fundamentals. At the same time, the overall inflation rate for the second quarter was 2.1%, with core inflation at 2.5%, both significantly lower than the first quarter and close to the Fed's 2% target. Larry Kudlow, Director of the White House National Economic Council, responded by saying, "We fully respect the independence of the Fed, while also hoping that they will respect the judgment of the data." He believes that the Fed "will soon catch up with the data performance." The next key policy signal is expected to come at the end of August during the Jackson Hole Economic Symposium in Wyoming, when Powell is expected to deliver an important speech to set the tone for future policy directions.