At the usual post‑meeting press conference, Fed Chair Jerome Powell outlined why policymakers chose to keep the federal funds rate at 4.25%–4.50% following July’s meeting and took reporters’ questions on the decision.
Powell’s press conference takeaways
- Economy is in a solid position.
- Inflation is somewhat above target.
- Believe the current stance of policy leaves us well positioned to respond in a timely way.
- Moderation in growth reflects a slowdown in consumer spending.
- Activity in the housing sector remains weak.
- Unemployment is low and has remained in a narrow range.
- Wide set of indicators suggests the job market is near maximum employment.
- Expects PCE up 2.5% and Core up 2.7% in 12 months through June.
- Most measures of longer-run inflation expectations are consistent with the Fed’s goal.
- Tariffs have exerted pressure on some goods, but the wider impact is uncertain.
- See current stance as appropriate to guard against inflation risks.
- On track to wrap up policy review by late summer.
- We are modestly restrictive.
- Economy not behaving as though modestly restrictive policy is holding it back inappropriately.
- Expect to have more information in coming months.
- We have made no decisions about September.
- Statement about uncertainty reflects change since the last meeting; it had not diminished further since the June meeting.
- Been a very dynamic time for trade negotiations.
- Still a ways away from seeing where things settle.
- Many uncertainties are left to resolve.
- Feels like there’s much more to come.
- GDP and PDFP numbers came in right about where we expected them.
- If you look at the labour market, by many measures it is still in balance.
- Very similar to where they were a year ago, job creation has slowed, but so has the supply of workers.
- Demand and supply for workers are coming down at about the same rate.
- Downside risks to the labour market are certainly apparent.
- Main number you have to look at now is the unemployment rate.
- Breakeven number for job creation has come down.
This section below was published at 18:00 GMT to cover the Federal Reserve’s policy decisions and the immediate market reaction.
At its July policy meeting, the Federal Reserve held the Federal Funds Target Range (FFTR) steady at 4.25%–4.50%, exactly as markets had anticipated.
Indeed, in a closely divided vote, the Federal Reserve opted to keep interest rates unchanged, offering no clear signal on when borrowing costs might be cut. Two governors—both Trump appointees who share the president’s view that policy remains too restrictive—registered their dissent.
Highlights from the FOMC statement
- The Fed leaves the key overnight interest rate in the 4.25–4.50% range, saying uncertainty about the economic outlook remains elevated.
- Recent indicators suggest growth of economic activity moderated in the first half of 2025.
- Inflation remains somewhat elevated.
- Unemployment rate remains low; labour market conditions remain solid.
- Governors Waller and Bowman dissented, preferring to lower the funds rate by a quarter of a percentage point.
Market reaction to Fed policy announcements
The Greenback maintains its bullish outlook in place, albeit receding a tad from earlier two-month tops near 99.60 when tracked by the US Dollar Index (DXY). Markets’ attention now gyrates to Chair Powell press conference.
US Dollar PRICE Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.53% | 0.41% | 0.25% | 0.26% | 0.79% | 0.55% | 0.45% | |
| EUR | -0.53% | -0.08% | -0.36% | -0.29% | 0.22% | 0.03% | -0.05% | |
| GBP | -0.41% | 0.08% | -0.26% | -0.15% | 0.33% | 0.14% | 0.06% | |
| JPY | -0.25% | 0.36% | 0.26% | 0.06% | 0.60% | 0.38% | 0.27% | |
| CAD | -0.26% | 0.29% | 0.15% | -0.06% | 0.53% | 0.30% | 0.22% | |
| AUD | -0.79% | -0.22% | -0.33% | -0.60% | -0.53% | -0.18% | -0.26% | |
| NZD | -0.55% | -0.03% | -0.14% | -0.38% | -0.30% | 0.18% | -0.08% | |
| CHF | -0.45% | 0.05% | -0.06% | -0.27% | -0.22% | 0.26% | 0.08% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
This section below was published at 10:00 GMT as a preview of the Federal Reserve’s policy announcements.
- The Federal Reserve is expected to leave the policy rate unchanged for the fifth consecutive meeting.
- The statement language and comments from Fed Chair Powell could offer key clues about the policy outlook.
- The US Dollar could weaken in case investors are convinced of a rate cut in September.
The United States (US) Federal Reserve (Fed) will announce its interest rate decision and publish the policy statement following the July policy meeting on Wednesday.
Market participants widely anticipate the US central bank will leave policy settings unchanged for the fifth consecutive meeting after cutting the interest rate by 25 basis points (bps) to the 4.25%-4.50% range last December.
The CME FedWatch Tool shows that investors virtually see no chance of a rate cut in July, while pricing in about a 64% probability of a 25 bps reduction in September. This market positioning suggests that the US Dollar faces a two-way risk heading into the event.
The revised Summary of Economic Projections (SEP), published in June, showed that policymakers’ projections implied 50 bps of rate cuts in 2025, followed by 25 bps reduction in both 2026 and 2027. Seven of 19 Fed officials pencilled in no cuts in 2025, two of them saw one cut, while eight of them projected two and two of them forecast three cuts this year.
Following the June meeting, Fed Governor Christopher Waller voiced his support for a July rate cut in his public appearances, arguing that they should not wait until the labor market is in trouble before easing the policy. Similarly, Fed Governor Michelle Bowman said that she is open to cutting rates as soon as July since inflation pressures remain contained. Meanwhile, United States (US) President Donald Trump extended his attempts to pressure the US central bank into cutting interest rates in July. While addressing reporters alongside British Prime Minister Keir Starmer on Monday, Trump reiterated that the US economy could be doing better if the Fed were to cut rates.
Previewing the Fed meeting, “the FOMC is again widely expected to keep its policy stance unchanged next week, with the Committee maintaining rates at 4.25%-4.50%,” noted analysts at TD Securities. “We expect Powell to repeat his patient, data-dependent policy stance while maintaining flexibility around the Committee’s next move in September. We believe two dissents, from Governors Bowman and Waller, are likely at this meeting.”
When will the Fed announce its interest rate decision and how could it affect EUR/USD?
The Fed is scheduled to announce its interest rate decision and publish the monetary policy statement on Wednesday at 18:00 GMT. This will be followed by Fed Chair Jerome Powell’s press conference starting at 18:30 GMT.
In case Powell leaves the door open for a rate cut in September, citing alleviated uncertainty after the US reached trade deals with some major partners, such as the European Union and Japan, the USD could come under renewed selling pressure with the immediate reaction.
Conversely, the USD could gather strength against its rivals if Powell repeats the need for a patient approach to policy-easing, highlighting sticky June inflation readings and relatively healthy labor market conditions. In this scenario, investors could refrain from pricing in a rate cut in September and wait for new inflation and employment data.
Eren Sengezer, European Session Lead Analyst at FXStreet, provides a short-term technical outlook for EUR/USD:
“The near-term technical outlook points to a buildup of bearish momentum. The Relative Strength Index (RSI) indicator on the daily chart stays below 50 and EUR/USD trades below the 50-day Simple Moving Average (SMA) for the first time since late February.”
“On the downside, 1.1440 (Fibonacci 23.6% retracement level of the February-July uptrend) aligns as the next support level ahead of 1.1340 (100-day SMA) and 1.1200 (Fibonacci 38.2% retracement). Looking north, resistance levels could be spotted at 1.1700 (20-day SMA), 1.1830 (end-point of the uptrend) and 1.1900 (static level, round level).”
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
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