Dive Brief:

• Federal Reserve Chair Jerome Powell on Tuesday said the central bank is in no hurry to trim the main interest rate, resisting pressure from President Donald Trump for a reduction of as much as 3 percentage points.
• “For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance,” Powell said in congressional testimony, citing the inflationary impact from tariffs while noting steady economic growth and a healthy job market.  
• Powell said policymakers will carefully assess fresh inflation data and did not rule out a rate cut at the Fed’s next scheduled meeting on July 29-30. “If it turns out that inflation pressures do remain contained, then we will get to a place where we cut rates sooner rather than later,” he said. “But I wouldn’t want to point to any particular meeting.”

Dive Insight:

The Fed on June 18 held the benchmark interest rate steady for the fourth consecutive policy meeting and released a median forecast indicating that central bankers expect to make two, quarter-point reductions by the end of 2025.

Still, Fed officials widely differ on the likely path for borrowing costs this year. Ten projected at least two rate cuts, two anticipated one reduction and seven penciled in no change.

Since the meeting, two policymakers have said they may favor a quarter-point reduction at the July meeting, warning of potential weakness in the labor market while noting that inflation has cooled.

“Should inflation pressures remain contained, I would support lowering the policy rate as soon as our next meeting in order to bring it closer to its neutral setting and to sustain a healthy labor market,” Fed Vice Chair for Supervision Michelle Bowman said Monday.

Bowman and Fed Governor Christopher Waller, who on Friday voiced openness to consideration of a rate cut next month, were nominated to the central bank by Trump.

The president, after weeks of calling on Powell to trim rates, recently turned up the heat, with Vice President JD Vance, Commerce Secretary Howard Lutnick and Kevin Hassett, director of the National Economic Council, joining in.

“No inflation, great economy — we should be at least two to three points lower,” Trump said Tuesday in a social media post.

“Would save the USA 800 Billion Dollars Per Year, plus,” Trump said before Powell testified to the House Financial Services Committee.

“I hope Congress really works this very dumb, hardheaded person, over,” the president said. “We will be paying for his incompetence for many years to come.”

Anxiety over tariffs and inflation eroded consumer confidence in the economy this month, the Conference Board found in a survey released Tuesday. The outlook among consumers unexpectedly dimmed across all age and income groups, and regardless of political affiliation.

“Tariffs remained on top of consumers’ minds and were frequently associated with concerns about their negative impacts on the economy,” Stephanie Guichard, senior economist for global indicators at the Conference Board, said in a statement.