US President Donald Trump and traders are exhorting and expecting Jerome Powell-headed Federal Reserve of the United States to make a major announcement of cutting interest rate. The Federal Reserve will likely be able to start cutting short-term borrowing costs by September, traders continued to bet on Tuesday, after a government report showed a widely expected increase in consumer prices last month. The market-priced probability of a Fed interest-rate cut by September remained around 60 per cent after the Bureau of Labor Statistics reported that the consumer price index rose 2.7 per cent in June from a year earlier, and underlying inflation was up 2.9 per cent.
Traders continue to see just a 5 per cent chance of a rate cut this month, with Fed policymakers mostly saying they want to see more data before reducing rates. U.S. President Donald Trump said on Tuesday that consumer prices were low and the Federal Reserve should bring down interest rates now.
“Consumer Prices LOW. Bring down the Fed Rate, NOW!!!,” President Trump wrote on Truth Social.
US Fed Meeting Date 2025
Federal Open Market Committee of the US Fed, which decides whether to hold or cut interest rate, holds meetings throughout the financial year. Federal Open Market Committee meetings are scheduled for July 29-30 and September 16-17.
Will US Fed Cut Interest Rate?
U.S. consumer prices increased by the most in five months in June amid higher costs for some goods, according to the Consumer Price Index reported by the Labor Department on Tuesday, suggesting tariffs were starting to impact inflation and potentially keeping the Federal Reserve on the sidelines until September.
Rising prices across an array of goods from coffee to audio equipment to home furnishings pulled inflation higher in June in what economists see as evidence of the Trump administration’s increasing import taxes passing through to consumers. Overall consumer prices rose 0.3 per cent in June, a roughly 3.5 per cent annual rate, after a 0.1 per cent increase in May.
Economists – and Fed officials – say they were expecting inflation to gather pace this summer as the lagged impact of tariffs gets passed along by businesses, and the June data suggest central bank policymakers in particular may remain reluctant to cut interest rates until more information is at hand. The tariff price shock could ultimately prove a temporary, one-time adjustment. But with the final tariff levels still being considered by President Donald Trump, and steeper levies threatened as of August 1, the inflation outlook remains unsettled.
FAQs
Q1. Which entity decides US Fed interest rate cut?
A1. Federal Open Market Committee of the US Fed decides interest rate cut.
Q2. What is overall consumer prices in the US?
A2. Overall consumer prices rose 0.3 per cent in June, a roughly 3.5 per cent annual rate, after a 0.1 per cent increase in May.