What could unfold at Powell's press conference
Here are the things to watch for in Fed Chair Powell's press conference at 2:30 pm EST on July 30:
- If Powell emphasizes the risk of a tariff pass-through to inflation expectations, then he could delay a rate cut until late in the year.
- If he focuses on improving or stabilizing services inflation, then he is likely thinking that potential inflation is not as worrisome, and he could be willing to cut short rates at the following policy meeting on September 17.
Powell may talk about both these things, but it all depends on the theme of emphasis he makes in response to the reporters' questions.
And there's the possibility that he doesn't hint at the Fed's direction at all during next week's press conference.
If he chooses, he can tip his hat during his speech on the morning of August 22 at the Jackson Hole conference on monetary policy that the Fed sponsors every year. Last year, Powell chose his Jackson Hole speech to signal an intent to start cutting rates again at the Fed's policy meeting the next month.
- David Payne
The stock market has a "perfect week" ahead of the Fed
Friday marked the end of a "perfect week" for the stock market, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.
The S&P 500 opened the week "with a new intraday (6,336.08) and closing high (6,305.60), and continued that path for the entire week, as it went on to set a new closing record on Tuesday, Wednesday, Thursday and Friday (with an intraday high of 6,395.82 and a closing high of 6,388.64)," Silverblatt notes.
Friday's settlement marked the S&P 500's 14th new closing high of the year and the 24th since Election Day.
Silverblatt says the last time the S&P 500 had a "perfect week" was in November 2021.
The Nasdaq Composite also closed the week at a new record high (21,108.32), while the Dow Jones Industrial Average, at 44,901.92, sits less than 0.3% below its record high of 45,014.04 from December 4.
- Karee Venema
The Fed's independence
President Trump has taken to social media posts and public statements in order to discredit Jerome Powell as Fed chair. And in doing so, he's also undermined the independence of the Fed.
What does that mean, the "independence of the Fed"? LPL Financial Chief Economist Jeffrey Roach defines it as "the ability to pursue their congressional mandate (full employment and stable prices) without outsider influence."
The Fed, Roach observes, "has a representative nature to it, desirous in protecting investors from politicized policy-making."
At the same time, however, "We shouldn’t be surprised that the executive branch is lobbying for lower rates. That's been the case during various administrations from Reagan to Obama."
President Trump still faces a basic mathematical hurdle, even if he gets what he thinks he wants. The Federal Open Market Committee sets interest rates based on a vote of its 12 members. The chair casts one vote.
And, anyway, Roach says, "There is no reason to aggressively cut rates down to one or two percent when inflation is above the Fed’s target, unemployment is low, and the economy is still growing."
Roach concedes the fed funds rate is higher than benchmarks set by several other central banks such as the European Central Bank, and that the Fed has room to cut "a few quarter points" by the end of 2025 if inflation stabilizes.
"But," he adds, "with privilege comes responsibility. The exceptional nature of our economy, the depth of our capital markets, and the safety of our legal structure often warrant a policy rate above international rates."
- David Dittman
Q2 GDP should come in strong ... but don't be fooled
First-quarter GDP came in at -0.5%, marking the first contraction of the U.S. economy since Q1 2022. However, this figure was impacted by a surge in imports as consumers accelerated purchases ahead of Trump's "Liberation Day" tariffs.
This time around, BofA Securities economists think second-quarter gross domestic product will likely arrive 2.3% thanks to "a reversal of the surge in imports due to pre-tariff front loading in Q1."
And while this does "indicate that the weak growth of the first quarter will be reversed," writes David Payne, staff economist at The Kiplinger Letter, in his GDP outlook, investors "shouldn't be fooled by the strength in the second quarter."
A more reasonable view of economic growth, according to Payne, is to average the two numbers from Q1 and Q2 to see the growth rate for the first half.
- Karee Venema
Who votes on Fed policy?
The Federal Open Market Committee, or FOMC, is the Federal Reserve's policy-setting group. It has 12 members, eight permanent and four who rotate each year.
The eight permanent voting committee members include the Fed chair and vice chair, the five Fed governors and the president of the New York Fed.
Four regional Fed presidents are rotated in each calendar year.
The 2025 FOMC voting committee consists of:
- Fed Chair Jerome Powell
- Vice Chair Philip Jefferson
- Fed Governor Michael Barr
- Fed Governor Michelle Bowman
- Fed Governor Lisa Cook
- Fed Governor Adriana Kugler
- Fed Governor Christopher Waller
- New York Fed President John Williams
- Boston Fed President Susan Collins
- Chicago Fed President Austan Goolsbee
- St. Louis Fed President Alberto Musalem
- Kansas City Fed President Jeffrey Schmid
In 2026, the presidents from Cleveland, Philadelphia, Dallas and Minneapolis will rotate in as FOMC voting members, according to the Federal Reserve.
- Karee Venema
Wall Street has a lot to look forward to during Fed week
"Next week is a bit like the Super Bowl, World Series, and Stanley Cup all rolled together," says Scott Helfstein, head of investment strategy at Global X.
In addition to the Fed decision, the economic calendar features the first reading on second-quarter gross domestic product (GDP), the Personal Consumption Expenditures (PCE) Price Index – the central bank's preferred measure of inflation – and the July jobs report.
"That will be a lot for markets to process in a short window," Helfstein notes.
As for the economy, Helfstein says that it looks strong by most metrics, though next week's data will provide key updates. "Growth may well come in above forecasts that built in drag from tariffs yet to really materialize. Meanwhile, job growth is slowing but has also consistently beat expectations."
As for the Fed, Helfstein says that Chair Powell "has signaled an intent to hold rates steady and wait for more data," and there's little reason to believe the central bank will shift from this strategy.
"They can be patient, and there is a lot of data coming in," he concludes.
- Karee Venema
Durable goods orders fall less than expected in June
Durable goods are the lone data point on Friday's economic calendar. According to the Census Bureau, new orders for manufactured goods made to last three years fell 9.3% from May to June to $311.8 billion.
Still, this was better than the 11.3% drop economists expected.
Excluding transportation, new orders were 0.2% higher. Excluding defense, orders were down 9.4%.
June's durable goods decline marks a sharp contrast to May's 16.4% surge, but Priscilla Thiagamoorthy, senior economist at BMO Capital Markets, says "wild swings like this are usually centered around volatile transportation equipment."
In June, transportation equipment orders fell 22.4% – the biggest decline since the onset of the pandemic – "as Boeing (BA) bookings took a nosedive," she adds.
The bottom line, according to Thiagamoorthy, is that the "the decline in nondefense capital goods bookings suggests a weaker handoff for Q3 business investment after robust gains earlier this year."
- Karee Venema
When does Jerome Powell's term as Fed chair end?
President Trump has not been subtle in his desire to fire Fed Chair Powell.
Earlier this month, stocks went on an intraday roller-coaster ride amid reports that Trump asked several Republican members of the House of Representatives if they thought he could remove Powell from his post.
But the question of whether or not Trump can fire Powell is seemingly moot given that his term as Fed chair is up in less than a year from now – on May 15, 2026.
It's unlikely that those in Trump's inner circle will encourage him to disrupt the status quo – and potentially send stocks and bonds tumbling – when Powell has such a small amount of time left in his term.
For what it's worth, Powell's term as a member of the Board of Governors of the Federal Reserve ends on January 31, 2028.
- Karee Venema
Um… the CEO said what about the Fed chair?
Your friendly neighborhood super-AI assistant is well aware that, until recently, it was less than rare for CEOs of publicly traded companies beyond the financial services sector – and rare even for heads of banks – to talk in specific terms about who should be and who should not be Federal Reserve chair.
The times they have a-changed, to the tune of President Donald Trump.
Among the non-financial executives to chime in so far, none has played louder notes than Cleveland-Cliffs (CLF) Chairman, President and CEO Lourenco Goncalves.
"Once Chairman Jerome Powell is gone," Goncalves said at the climax of his company's second-quarter conference call, "and that is not a matter of when, not if, and as soon as interest rates come down by 50 or 75 basis points, the automotive sector will take off again."
Goncalves is referring, specifically, to the fact that higher interest rates puts buying cars for many folks out of reach and that lower rates will make automobile purchase more affordable.
"Demand is there, but this Fed chairman will not act," he concluded. "So we need a new Fed chairman appointed as soon as possible."
We continue to track conference calls this earnings season for commentary on Trump vs Powell, and we'll have more soon…
- David Dittman
David is the former managing editor and chief investment strategist of Utility Forecaster and the former editorial director of Investing Daily, Charles Street Research, and Weiss Ratings. A former stockbroker, David has been working in financial media for more than 20 years.
ECB holds rates steady
On Thursday, the European Central Bank (ECB) concluded its July policy meeting by holding its deposit rate steady at 2%.
This marked the first pause in the ECB's rate-cutting campaign that began last year when its key interest rate was at a record high of 4%.
"The environment remains exceptionally uncertain, especially because of trade disputes," the European Central Bank wrote in its policy statement.
The European Union and the U.S. are currently undergoing trade negotiations. The EU is pushing for 15% tariffs across the board, while President Trump has threatened 30% tariffs on European imports.
On Thursday, all but one EU country (Hungary) voted in favor of retaliatory tariffs that will go into effect on August 7 should the two countries fail to come to an agreement.
- Karee Venema
Home sales data disappoints
New home sales were up 0.6% month over month in June to a seasonally adjusted annual rate of 672,000, according to the Census Bureau. This was below the 649,000 economists expected.
"The slight gain, which follows a sharp contraction in May, reflects weak buyer demand resulting from challenging affordability conditions and heightened economic uncertainty," says Charlie Dougherty, senior economist at Wells Fargo.
The average sales price of a new home sold fell 2% from May to June to $501,000, but was 1.1% higher on a year-over-year basis.
This is just the latest disappointing reading on the housing market. On Wednesday, the National Association of Realtors (NAR) said that existing home sales were down 2.7% from May to June to a seasonally adjusted annual rate of 3.93 million. Economists expected 4.01 million.
"High mortgage rates are causing home sales to remain stuck at cyclical lows," said NAR Chief Economist Lawrence Yun. "If the average mortgage rates were to decline to 6%, our scenario analysis suggests an additional 160,000 renters becoming first-time homeowners and elevated sales activity from existing homeowners."
President Trump, meanwhile, used the housing data to issue a swipe at the Fed chair. "Housing in our Country is lagging because Jerome 'Too Late' Powell refuses to lower Interest Rates," Trump wrote in a Wednesday morning post on Truth Social. "Our Rate should be three points lower than they are, saving us $1 Trillion per year (as a Country). This stubborn guy at the Fed just doesn't get it – Never did, and never will."
- Karee Venema
The labor market is holding steady
The Federal Reserve has a dual mandate of price stability and maximum employment – and both sides appear to be on solid footing at the moment.
While the most recent CPI report showed a slight acceleration in inflation, the data were in line with economists' expectations.
And the June jobs report confirmed a still-healthy labor market. According to the Bureau of Labor Statistics, nonfarm payrolls rose by 147,000 in June, which was a bit higher than May's upwardly revised 144,000 figure and more than the 110,000 new jobs economists expected.
The unemployment rate ticked lower to 4.1%.
The next jobs report won't be released until the Friday after the Fed meeting, but this morning's release of initial jobless claims was more of the same.
Specifically, the Labor Department said first-time unemployment claims fell by 4,000 to 217,000 in the week ending July 18. Economists expected claims to rise by 6,000 to 227,000.
"Although markets are likely already looking ahead to next week's monthly employment data, today's jobless claims total paints a familiar picture – there are still few signs of major cracks in the labor market," says Chris Larkin, managing director of Trading and Investing at E*TRADE from Morgan Stanley.
Larkin adds that if this trend remains intact, the Fed has one less reason to cut interest rates.
- Karee Venema
Trump heads to the Fed building
President Trump is taking a site tour of the Federal Reserve building in Washington, D.C., this afternoon amid criticism of the central bank's handling of its renovation of the facilities. Specifically, the cost of the improvements is now at $2.5 billion, which is notably higher than the initial $1.9 billion price tag.
As UBS economist Abigail Watt explains, "The renovations first came up in the Chair's semiannual testimony to Congress in June with [Republican] Senator [Tim] Scott of South Carolina calling the renovations 'luxury upgrades that feel more like they belong in the Palace of Versailles.'"
The White House quickly joined the condemnation of the cost of these improvements and used this as example of how Powell is mishandling his duties. Indeed, when asked by a reporter earlier this month if the increased cost is a fireable offense, President Trump said, "I think it sort of is."
The Supreme Court indicated earlier this year that members of the Federal Reserve's board of governors or the Federal Open Market Committee could only be removed "for cause."
Powell has denied any wrongdoing and in a letter to Russell Vought, director of the Office of Management and Budget, noted that the Fed has "taken great care to ensure the project is carefully overseen since it was first approved by the Board in 2017."
- Karee Venema
The Federal Reserve is not likely to cut short-term rates until closer to the end of 2025
Federal Reserve Chair Jerome Powell has emphasized that the Fed won't cut interest rates until it has a better understanding of how higher tariffs affect longer-term inflation expectations.
And because price effects from tariffs take time to work through the supply chain to the consumer, it's not likely that it will be soon.
Tariffs have only had a small impact on inflation so far. But Powell has noted that professional forecasters believe tariffs will raise inflation this year, at least temporarily.
There's a danger that these price increases could affect longer-term inflation expectations. As a result, Powell feels that it is necessary to maintain a moderately restrictive monetary policy, as the Fed has been doing.
Complicating matters for Powell is that cutting rates now could create market perceptions that the Fed is being unduly influenced by the White House.
The Fed's next policy decision will be released the afternoon of Wednesday, July 30.
- David Payne
David is both staff economist and reporter for The Kiplinger Letter, overseeing Kiplinger forecasts for the U.S. and world economies. Previously, he was senior principal economist in the Center for Forecasting and Modeling at IHS/Global Insight, and an economist in the Chief Economist's Office of the U.S. Department of Commerce.
Fed meeting schedule for 2025
The next Fed meeting, which runs from July 29 to July 30, marks the fifth gathering of 2025. That means there are three more to go.
"The committee meets eight times a year, or about once every six weeks," writes Kiplinger contributor Dan Burrows in his feature, "When Is the Next Fed Meeting?".
The Federal Open Market Committee "is required to meet at least four times a year and may convene additional meetings if necessary," Burrows adds, noting that "the convention of meeting eight times per year dates back to the market stresses of 1981."
Fed meetings last two days and wrap up with the release of a policy decision at 2 pm Eastern Standard Time. This is typically followed by the Fed chair's press conference at 2:30 pm.
Here is the full Fed meeting schedule for 2025:
- January 28 to 29
- March 18 to 19
- May 6 to 7
- June 17 to 18
- July 29 to 30
- September 16 to 17
- October 28 to 29
- December 9 to 10
- Karee Venema
President Trump's tariff policies are beginning to have a slight impact on inflation
Inflation picked up in June, according to the Bureau of Labor Statistics. The Consumer Price Index (CPI) was up 0.3% month over month in June, faster than May's 0.1% increase. The CPI was 2.7% higher year over year, an uptick from the 2.4% rise seen the month prior.
Core CPI, which excludes volatile food and energy prices and is seen as a better measure of underlying inflation trends, was up 0.2% month over month and 2.9% year over year, exceeding May's readings.
The June CPI report "confirms what many have been warning: tariffs are potentially moderately inflationary, and they're beginning to show up in consumer prices," says Matt Mena, crypto research strategist at 21Shares.
But Mena says we'll need to see more data points to confirm this trend.
As for future rate cuts, the strategist notes that the central bank has been preparing for a pivot, but the CPI report "complicates the picture," and the hotter headline figure "could give the Fed pause on cutting rates too soon."
As of June 24, CME Group's FedWatch shows that futures traders are pricing in a quarter-point rate cut in September and another in December.
- Karee Venema
With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021, and oversees a wide range of investing coverage, including content focused on equities, fixed income, mutual funds, ETFs, macroeconomics and more.