July 30, 2025
June 18, 2025
Jerome H. Powell
July 30, 2025 FOMC Statement
FOMC statement
Federal Reserve issues FOMC statement
For release at 2:00 p.m. EDT
Although swings in net exports have affected continue to affect the data, recent indicators suggest that growth of economic activity has continued to expand at a solid pace. moderated in the first half of the year. The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook has diminished but remains elevated. The Committee is attentive to the risks to both sides of its dual mandate.
In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.
Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Susan M. Collins; Lisa D. Cook; Austan D. Goolsbee; Philip N. Jefferson; Adriana D. Kugler; Alberto G. Musalem; and Jeffrey R. Schmid; Schmid. Voting against this action were Michelle W. Bowman and Christopher J. Waller. Waller, who preferred to lower the target range for the federal funds rate by 1/4 percentage point at this meeting. Absent and not voting was Adriana D. Kugler.
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Implementation Note issued June 18, July 30, 2025
Our summary
What changed
- The FOMC revised its economic assessment, noting that growth of economic activity moderated in the first half of the year, whereas the previous statement said activity continued to expand at a solid pace.
- The language on uncertainty was updated: it now says uncertainty about the economic outlook remains elevated, removing the phrase that it had diminished.
- The vote was not unanimous: Michelle W. Bowman and Christopher J. Waller dissented, preferring a 1/4 percentage point cut in the federal funds rate, while Adriana D. Kugler was absent and not voting.
- The target range for the federal funds rate was maintained at 4-1/4 to 4-1/2 percent, and the balance sheet reduction policy was unchanged.
Implications
The downgrade in the growth assessment and the dissents favoring a cut suggest the FOMC is acknowledging softer economic momentum, but the decision to hold rates steady indicates a preference to wait for more data before adjusting policy.
The persistent elevated uncertainty and the split vote may signal that the FOMC is closely monitoring incoming data, with some members leaning toward easing if conditions warrant.
Summary generated automatically from the statements. Not investment advice.
Implementation Note
The settings that put the decision into effect: the interest rate paid on reserves, the FOMC's instructions to the New York Fed's trading desk, and the discount rate. Changes are marked the same way as in the statement.
- The Board of Governors of the Federal Reserve System voted unanimously to maintain the interest rate paid on reserve balances at 4.4 percent, effective
June 20,July 31, 2025. - As part of its policy decision, the Federal Open Market Committee voted to direct the Open Market Desk at the Federal Reserve Bank of New York, until instructed otherwise, to execute transactions in the System Open Market Account in accordance with the following domestic policy directive: "Effective
June 20,July 31, 2025, the Federal Open Market Committee directs the Desk to: - Undertake open market operations as necessary to maintain the federal funds rate in a target range of 4-1/4 to 4‑1/2 percent.
- Conduct standing overnight repurchase agreement operations with a minimum bid rate of 4.5 percent and with an aggregate operation limit of $500 billion.
- Conduct standing overnight reverse repurchase agreement operations at an offering rate of 4.25 percent and with a
per‑counterpartyper-counterparty limit of $160 billion per day. - Roll over at auction the amount of principal payments from the Federal Reserve's holdings of Treasury securities maturing in each calendar month that exceeds a cap of $5 billion per month. Redeem Treasury coupon securities up to this monthly cap and Treasury bills to the extent that coupon principal payments are less than the monthly cap.
- Reinvest the amount of principal payments from the Federal Reserve's holdings of agency debt and agency mortgage‑backed securities (MBS) received in each calendar month that exceeds a cap of $35 billion per month into Treasury securities to roughly match the maturity composition of Treasury securities outstanding.
- Allow modest deviations from stated amounts for reinvestments, if needed for operational reasons."
- In a related action, the Board of Governors of the Federal Reserve System voted unanimously to approve the establishment of the primary credit rate at the existing level of 4.5 percent.
Press conference
July 30, 2025, 2:30 p.m. ET · Read the transcript
What Powell said that the statement didn't
- Chair Powell said GDP rose at a 1.2 percent pace in the first half of the year, down from 2.5 percent last year, with a stronger 3 percent increase in the second quarter.
- He said payroll job gains averaged 150,000 per month over the past three months and the unemployment rate was 4.1 percent.
- He said total PCE prices rose 2.5 percent over the 12 months ending in June and core PCE prices rose 2.7 percent.
- He said tariff revenue was being collected at about $30 billion a month, with most of the cost currently paid by upstream institutions rather than consumers.
- He said the FOMC was on track to wrap up modifications to its Statement on Longer-Run Goals and Monetary Policy Strategy by late summer.
Summary generated automatically from the transcript and the statement.