The Federal Reserve resisted massive pressure from the White House and held interest rates steady following Wednesday’s meeting of its 12-member rate-setting committee.
The 10-2 vote, though, represented a rare time when the vote wasn’t unanimous. Two board members, both appointed by President Donald Trump – the source of the intense pressure to lower rates – voted for a cut.
For the fifth straight meeting, the committee kept its benchmark policy rate in a range between 4.25% and 4.5% as they weighed how importers, retailers and consumers will split the costs of higher duties on imports.
The committee includes all seven governors on the central bank’s board, who are appointed by the U.S. president. The other five voters are drawn from among 12 regional-bank presidents, who vote on a rotating basis.
The Wall Street Journal reported it was the first in five years that more than one Fed official voted against Powell, and the first since 1993 in which more than one board governor dissented, according to The Journal.
Powell and his colleagues are studying how tariffs filter through inflation data amid anxiety that higher goods prices will keep inflation above the Fed’s 2% goal for a fifth year. Inflation has declined notably from 2021-23 highs without the recession many economists predicted, but officials are cautious about declaring victory and possibly reigniting price pressures by cutting rates prematurely.
