Most Fed officials oppose July rate cuts

This week, Federal Reserve officials said they will closely monitor the US Consumer Price Index (CPI) over the next few months. They argue that this is key to evaluating the long-term inflationary effects of Donald Trump’s trade tariffs. Therefore, a rate cut at the upcoming central bank meeting appears unlikely.

Earlier, Fed Governors Christopher Waller and Michelle Bowman had advocated for monetary easing at the July 29–30 meeting, citing subdued price growth. However, San Francisco Fed President Mary Daly warned that recent US trade duties could accelerate inflation, making a rate adjustment more probable in the fall than in July.

The latest economic data supports a cautious approach. In May, American CPI rose to 2.4%, exceeding the 2% forecast. In addition, Thursday’s labor market report revealed a concerning hike in jobless claims, reaching their highest level since November 2021.