US Benchmark Interest Rate Stays ‘4.25~4.50%’ for Fifth Consecutive Hold…Two Board Members Dissent

Two members argue for a 0.25%P rate cut and oppose the decision

The Fed held the benchmark interest rate steady at the current 4.25~4.50% on the 30th (local time), despite repeated pressure from President Donald Trump for a rate cut.

The Fed announced this in materials disclosing the results of the two-day Federal Open Market Committee (FOMC) meeting held until this day.

The Fed stated, "The (US) unemployment rate remains low and the labor market is robust, but inflation remains somewhat high," and explained, "Uncertainty about the economic outlook remains high," as the background for the decision to hold rates steady.

At this FOMC, out of 12 members, 9 including Chair Jerome Powell supported holding the rate, while Michelle Bowman and Christopher Waller called for a 0.25 percentage point cut and opposed the hold decision. Adriana Kugler was absent.

Last month, the board unanimously decided to hold the rate steady.

Since the launch of the Trump Administration, the Fed has held the rate steady for five consecutive FOMCs, maintaining the US-Korea interest rate gap at 2.0 percentage points at the upper end.

President Trump, who had anticipated a reduction in the Treasury interest burden and a boost to the economy through rate cuts, has openly expressed strong discontent over the Fed’s repeated holds, even raising issues about Chair Powell’s tenure ahead of this meeting to pressure for a rate cut.

On this day, prior to the FOMC results, President Trump posted on Truth Social (a social networking service) highlighting the better-than-expected 2nd quarter GDP growth rate (3% annualized, quarter over quarter), urging Chair Powell to "lower the rate now."

Gojung Sam, Hankyung.com Reporter jsk@hankyung.com