Fed Sees Significant Uncertainty Still Surrounding Current US Economic Landscape

The Federal Open Market Committee voted to keep the interest rate unchanged at the July meeting, with a vote of 9 to 2 in favor of the decision.
As a result, the Federal Reserve’s key interest rate, in place since the beginning of this year, remains within the range of 4.25% – 4.50%.
Two members of the Federal Open Market Committee, Michelle Bowman and Christopher Waller, opposed the decision to maintain the interest rate, advocating for resuming rate cuts.

The interest rate statement included two changes compared to the version issued after the central bank’s previous meeting, related to the committee’s view of economic conditions in the United States.
The first difference is that the Federal Reserve’s June statement expressed an optimistic outlook on economic conditions, affirming that the U.S. economy “continues to grow at a steady pace.”

However, Wednesday’s meeting indicated significant uncertainty, with the interest rate statement adopting a less optimistic tone compared to the June meeting, which issued a statement noting that “uncertainty is declining but remains strongly present in the landscape.”

The second difference between the June interest rate statement and the one issued this month is that traders expected a rate cut in September, although this primarily depends on economic data. Meanwhile, Federal Reserve Board members in the June meeting remotely hinted at the possibility of two rate cuts this year.