This Fed Decision Was Unlike Any Other in Decades

UPDATE Jul 30, 2025 1:26 PM CDT

Today marked the end of a decades-long era of relative harmony at the Federal Reserve. The central bank left its key interest rate steady at around 4.3% for the fifth time this year, but two of its seven governors opposed the decision, the AP reports. This is the first time since 1993 that more than one Fed governor has voted against an interest rate decision, CNBC reports. Christopher Waller and Michelle Bowman—both appointed by President Trump—voted to cut the rate, a move that Trump has demanded in regular tirades against Fed chair Jerome Powell.

Jul 30, 2025 11:35 AM CDT

The Wall Street Journal notes that dissents were a lot more common in the 1980s, when the Reagan administration sought to undercut then-Fed chair Paul Volcker's policies, but there has been a lot more consensus since the early 1990s. In September, Bowman became the first Fed governor to dissent in 19 years—though in that vote, she opposed a half-point rate cut. Earlier this month, Waller, seen as a possible successor to Powell, argued in favor of cutting rates, pointing to signs that the economy is weakening, the AP reports. "Private-sector payroll growth is near stall speed," Waller said. "We should not wait until the labor market deteriorates before we cut the policy rate."

• The post-meeting statement from the Fed was slightly more pessimistic than their June statement, CNBC reports. "Although swings in net exports continue to affect the data, recent indicators suggest that growth of economic activity moderated in the first half of the year," it said. "The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated."

Powell and most of the other governors favor a "wait-and-see" approach to cutting rates, citing factors including the effects of Trump's tariffs on the inflation rate. The AP notes that contrary to "almost all economists," Trump argues that the rate should be cut because the economy is doing well. "If your economy is hot, you're supposed to have higher short-term rates," says Tom Porcelli, chief US economist at PGIM Fixed Income. "Private-sector payroll growth is near stall speed," Waller said. "We should not wait until the labor market deteriorates before we cut the policy rate."

This story has been updated with new developments.