Fed Holds Rates Steady as Expected, but Two Dissent From Decision

As was almost universally expected, the U.S. Federal Reserve Wednesday left its benchmark fed funds rate range steady at 4.25%-4.5%.

In a rare departure from norms, two Fed governors — Michelle Bowman and Chris Waller — dissented from the decision, preferring instead to trim rates by 25 basis points. It’s the first time two Fed members have dissented from a policy decision since December 1993, according to Carson Group Chief Market Strategist Ryan Detrick.

“Although swings in net exports continue to affect the data, recent indicators suggest that growth of economic activity moderated in the first half of the year,” said the Fed’s accompanying statement. “The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated.”

Bitcoin (BTC) dipped nearly 0.5% in the minutes following the decision to $117,400. The S&P 500 and the Nasdaq indexes slipped modestly from earlier gains.

Notably, a trader called “Spice” put an almost $1.3 million wager through blockchain-based prediction venue Polymarket on the Fed keeping interest rates steady, Lookonchain noted earlier Wednesday. Bettors put roughly 98% probability for that outcome, meaning that trader would profit 2 cents on every 98 cents.

However, as the decision approached the trader reduced the position to $724 million, Polymarket data showed.

Market participants now turn their attention on Fed Chair Jerome Powell’s remarks at 2:30 pm ET for signals of a potential rate cut coming at the next meeting in September. Powell’s preference for holding policy steady these last few months has been under considerable pressure from President Trump.

Prior to today’s events, the CME FedWatch tool showed a nearly 60% probability for lower rates in September.