PinnedUpdated July 30, 2025, 12:01 p.m. ETThe Federal Reserve is set to hold interest rates steady for the fifth-straight time in its meeting on Wednesday, despite a barrage of attacks from President Trump to lower borrowing costs significantly.Standing pat would keep interest rates at a range of 4.25 percent to 4.5 percent, a level reached in December after a series of cuts in the second half of 2024. The Fed will release a policy statement alongside its rate decision at 2 p.m. Eastern. Jerome H. Powell, the Fed’s chair, will hold a news conference at 2:30 p.m.After months of maintaining a wait-and-see stance on rate cuts, policymakers at the central bank are beginning to more openly debate about the right time to get going again. That decision will be based on how a raft of economic data released this week pans out. The Fed will also take into consideration the new tariff rates that President Trump has said he will impose on Friday.Here’s what to know ahead of the meeting:Tariff talk: Fed policymakers have for months braced for Mr. Trump’s tariffs to raise inflation and weigh on economic activity. That started to happen more noticeably in June, although the impact is still muted compared with what economists had first feared. Mr. Powell said this month that while the Fed forecast that tariffs would raise inflation by some degree over the summer, officials were “prepared to learn that it can be higher or lower or later or sooner than we’d expected.” If not for the tariffs, Mr. Powell said, the Fed could have cut interest rates by now.Internal divisions: Up until this point, members of the Fed’s policy-setting committee have unanimously voted to keep interest rates on hold this year. But that cohesion has started to break down and could result in the most opposition from senior officials to a policy decision in roughly 30 years. Christopher J. Waller and Michelle W. Bowman have indicated their support for the Fed to lower borrowing costs as soon as this week. Mr. Trump nominated both to the Fed’s seven-member board of governors during his first term in the White House. The last time two board members dissented was in December 1993, when Alan Greenspan was the Fed’s chair.Plan of action: Mr. Waller, who is seen as a potential successor to Mr. Powell when his term as Fed chair ends next year, has been the most direct when it comes to articulating the case for cutting rates. Citing his worries about the labor market, he said in a speech last week that the Fed “should not wait until the labor market deteriorates” before taking action. Other policymakers appear more worried about inflation.Readying a September cut? Mr. Powell is unlikely to send a definitive signal about when the Fed could start to reduce rates. But he could begin to lay out more detailed parameters about what would compel the Fed to cut. For it to happen in September, inflation cannot accelerate too unexpectedly, and the labor market must continue to cool. If inflation quickens too much or the economy stays solid, it could be hard for officials to justify shifting out of the wait-and-see mode.The Trump card: The Fed will face enormous scrutiny when it eventually pivots toward rate cuts because of an incessant pressure campaign by the Trump administration. If the central bank does not have an ironclad case to cut, it risks inciting questions about whether it is bowing to the president, who wants borrowing costs significantly lower. Just hours before Wednesday’s interest rate decision, the president once again called on Mr. Powell to provide relief to borrowers, reprising one on of his favorite nicknames for the Fed chair: “Mr. Too Late.” Mr. Powell has repeatedly stressed that the Fed does not factor politics into its interest rate decisions, as Mr. Trump has claimed.Under construction: Mr. Trump has broadened his criticism of Mr. Powell beyond personal insults to attacking him for his management of the central bank. The president’s latest target is a $2.5 billion renovation of the Fed’s headquarters in Washington, which Mr. Trump toured last week. Legal experts worry that by seeking to blame Mr. Powell for cost overruns, Mr. Trump is exploring avenues to try to fire the Fed’s chair before his term ends in May. The president has since backed down from that threat. But the tension is unlikely to dissipate soon.July 30, 2025, 12:32 p.m. ETIn his frustration at the Fed, President Trump has often pointed to repeated rate cuts in Europe as a sign that Powell has been too slow. But rate cuts in the eurozone have been driven by concerns about the economic damage of tariffs on the region. Last week, just before the U.S. and E.U. announced a trade deal, the European Central Bank held interest rates steady for the first time in a year. After eight rate cuts, E.C.B. policymakers said they were in a “wait-and-watch” mode.July 30, 2025, 12:30 p.m. ETA steel manufacturer in Tochigi, Japan. Countries are accepting tariffs of 15 to 20 percent to do business with the United States, with even higher rates imposed on exports of critical products, like steel.Credit...Noriko Hayashi for The New York TimesAs major economies like the European Union and Japan fall in line to sign agreements with President Trump that include the highest tariffs in modern history, the president’s vision for global trade is rapidly being realized.That new normal uses America’s economy as leverage, with other countries accepting tariffs of 15 to 20 percent to do business with the United States. Even higher rates will be imposed on exports of critical products, like steel, or on certain adversarial countries, like China.The outcome has seemingly proved Mr. Trump right that his tariff threats are a powerful bargaining tool. And the muted market reaction to 15 percent tariffs on Japan and the European Union suggests that the panic many expected from his earlier, more extreme levies may not materialize.While the president’s plan for global trade now looks like a political victory, whether it will be an economic success remains much more debatable. Many economists continue to predict that Mr. Trump’s tariffs will result in higher prices both for businesses that import products and for the consumers who buy them. They expect that to slow the economy and backfire, at least somewhat, on the president’s efforts to rev up manufacturing.July 30, 2025, 12:17 p.m. ETOne cost of President Trump’s pressure campaign against the Fed is that it may set the bar higher for the central bank to move in a direction that aligns with what the administration wants. David Wilcox, a former head of the Fed’s research and statistics division, told me recently: “A Fed that is attuned to guarding its independence will want the case for cutting to be just a little clearer and a little more unambiguous than if the administration had remained silent.”July 30, 2025, 12:07 p.m. ETThe stock market is muted as the Fed’s announcement approaches, with Wall Street also weighing a report showing that economic growth softened in the first half of the year. The central bank is widely expected to hold rates steady today, but investors will look for hints on future moves. Investors are currently pricing in a roughly 60 percent chance of a rate cut in September, according to CME FedWatch.July 30, 2025, 12:05 p.m. ETWell before the Fed could even announce its decision on interest rates, President Trump had resumed his attacks on Jerome Powell, the chair of the central bank, and reprised his demands for rate cuts.Trump seized on a report released Wednesday showing that the economy grew at a 3 percent annual rate in the second quarter, a figure somewhat skewed by tariffs. Trump said it proved that the Fed “MUST NOW LOWER THE RATE,” adding on social media that it should help people buy or refinance homes.July 30, 2025, 12:03 p.m. ETThe strained nature of the relationship between President Trump and Jerome H. Powell, the Federal Reserve chair, was on display last week when Mr. Trump made a rare visit to the central bank to inspect renovations at its headquarters in Washington.Credit...Haiyun Jiang/The New York TimesPresident Trump’s relationship with Jerome H. Powell, the chair of the Federal Reserve, has almost always been a tense one. Aside from some niceties shared when Mr. Trump announced Mr. Powell as his pick to lead the central bank during his first term in the White House, the president has rarely had a positive word to say about the Fed’s chair.The strained nature of their relationship was on full display in the lead up to Wednesday’s policy meeting when Mr. Trump descended on the central bank for a rare visit last week and publicly squabbled with Mr. Powell over the true costs of renovations to the Fed’s headquarters in WashingtonThe renovations are just the latest in a barrage of attacks directed at Mr. Powell, who the president has called a litany of insults ranging from “stubborn mule” to “numbskull.” One of his favorite jabs is to refer to the Fed chair as “Mr. Too Late,” in reference to Mr. Trump’s belief that the Fed has erred by keeping borrowing costs steady so far this year rather than reduce them as the president has demanded.With the Fed once again expected to stand pat on Wednesday and keep interest rates at a range of 4.25 percent to 4.5 percent, tensions between two of the most powerful people in Washington is unlikely to ease any time soon.At least for now, Mr. Trump has backed off his threats to try to remove Mr. Powell before his term as chair expires in May — a legally dubious strategy in its own right. But that weapon could easily be brandished again or Mr. Trump could resort to another tactic and announce his pick to replace Mr. Powell very early. That would risk muddying the central bank’s communications about the path forward for monetary policy, especially if the chair-in-waiting espouses very different guidance than the current chair.July 30, 2025, 12:01 p.m. ETVehicles on a container ship at a port in Miami last month. Auto rates have been largely stable but remain elevated, and tariffs threaten to push prices higher.Credit...Scott McIntyre for The New York TimesThe Federal Reserve is expected to keep its key rate steady on Wednesday for its fifth straight meeting, but an influx of economic data this week may shed light on where rates may be headed later this year.For now, that means consumers looking to borrow will need to wait a bit longer for better deals on many loans, though savers will benefit from steadier yields on their savings accounts — all of which are influenced by the Fed’s policy.The central bank has kept its benchmark rate unchanged since January, which has riled President Trump, who has continued to attack the Fed chair, Jerome H. Powell, and demand that he aggressively lower borrowing costs, even going as far as threatening to fire him over it (which legal experts and the chair say he cannot do).The Fed’s benchmark rate is set at a range of 4.25 to 4.5 percent. In an effort to tamp down inflation, the central bank began lifting rates rapidly — from near zero to above 5 percent — between March 2022 and July 2023. Prices cooled considerably, and the Fed pivoted to rate cuts, lowering rates in September, November and December of last year.Politicizing the Fed, of course, can be disastrous for the broader economy and consumers, and experts say they’re already worried about the independence of the next chair; Mr. Powell’s term ends in May. The rate-setting body typically turns to rate cuts when the economy is softening in an effort to spur growth. But the current economic picture hasn’t been entirely clear given the volatility of President Trump’s policies on tariffs, along with the broader effects of his restrictive immigration policies and widespread federal job cuts — all of which have made forecasting a challenge.Here is where various rates stand now.Auto RatesWhat’s happening now: Auto rates have been largely stable but remain elevated, while transaction prices are rising slowly and unevenly, according to Kelley Blue Book, though tariffs threaten to push prices higher.Car loans tend to track with the yield on the five-year Treasury note, which is influenced by the Fed’s key rate. But other factors determine how much borrowers actually pay, including your credit history, the type of vehicle, the loan term and the down payment. Lenders also take into consideration the levels of borrowers becoming delinquent on auto loans. As those move higher, so do rates, which makes qualifying for a loan more difficult, particularly for those with lower credit scores.The average rate on new car loans was 7.3 percent in June, according to Edmunds, a car shopping website, unchanged from May and June 2024. Rates for used cars were higher: The average loan carried an 10.9 percent rate in June, largely unchanged from May and down slightly from 11.5 percent in June 2024.Where and how to shop: Once you establish your budget, get preapproved for a car loan through a credit union or bank (Capital One and Ally are two of the largest auto lenders) so you have a point of reference to compare financing available through the dealership, if you decide to go that route. Always negotiate on the price of the car (including all fees), not the monthly payments, which can obscure the loan terms and what you’ll be paying in total over the life of the loan.Credit CardsWhat’s happening now: The interest rates you pay on any balances that you carry had edged slightly lower after the most recent Fed cuts, but the decreases have slowed, experts said. Last week, the average interest rate on credit cards was 20.13 percent, according to Bankrate.Much depends, however, on your credit score and the type of card. Rewards cards, for instance, often charge higher-than-average interest rates.Where and how to shop: Last year, the Consumer Financial Protection Bureau sent up a flare to let people know that the 25 biggest credit-card issuers had rates that were eight to 10 percentage points higher than smaller banks or credit unions. For the average cardholder, that can add up to $400 to $500 more in interest a year.Consider seeking out a smaller bank or credit union that might offer you a better deal. Many credit unions require you to work or live someplace particular to qualify for membership, but some bigger credit unions may have looser rules.Before you make a move, call your current card issuer and ask them to match the best interest rate you’ve found in the marketplace that you’ve already qualified for. And if you do transfer your balance, keep a close eye on fees and what your interest rate would jump to once the introductory period expires.MortgagesWhat’s happening now: Mortgage rates have bounced around a bit in recent months, but have remained within a relatively tight range, staying below 7 percent. Rates peaked at about 7.8 percent late last year and had fallen as low as 6.08 percent in late September.Rates on 30-year fixed-rate mortgages don’t move in tandem with the Fed’s benchmark, but instead generally track with the yield on 10-year Treasury bonds, which are influenced by a variety of factors, including expectations about inflation, the Fed’s actions and how investors react.The average rate on a 30-year fixed-rate mortgage was 6.74 percent as of July 24, according to Freddie Mac, down slightly from 6.75 percent the previous week and 6.78 percent a year ago.Other home loans are more closely tethered to the central bank’s decisions. Home-equity lines of credit and adjustable-rate mortgages — which carry variable interest rates — generally adjust within two billing cycles after a change in the Fed’s rates.Where and how to shop: Prospective home buyers would be wise to get several mortgage rate quotes — on the same day, since rates fluctuate — from a selection of mortgage brokers, banks and credit unions.That should include: the rate you’ll pay; any discount points, which are optional fees buyers can pay to “buy down” their interest rate; and other items like lender-related fees. Look to the “annual percentage rate,” which usually includes these items, to get an apples-to-apples comparison of your total costs across different loans. Just be sure to ask what’s included in the A.P.R.Savings Accounts and C.D.sWhat’s happening now: Everything from online savings accounts and certificates of deposit to money market funds tend to move in line with the Fed’s policy.Savers are no longer benefiting from the juiciest yields, but you can still find returns at online banks of 4 percent or more.Traditional commercial banks’ yields, meanwhile, have remained anemic. The national average savings account rate was recently 0.56 percent, according to Bankrate.Where and how to shop: Rates are one consideration, but you’ll also want to look at providers’ history, minimum deposit requirements and any fees (high-yield savings accounts don’t usually charge fees, but other products, like money market funds, do). DepositAccounts.com, part of LendingTree, tracks rates across thousands of institutions and is a good place to start comparing providers.The yield on the Crane 100 Money Fund Index, which tracks the largest money-market funds, was 4.11 percent as of Monday, down from 5.13 percent at the end of last June. (Check out my colleague Jeff Sommer’s columns for more insight into money-market funds.)Student LoansWhat’s happening now: There are two main types of student loans. Most people turn to federal loans first. Their interest rates are fixed for the life of the loan, they’re far easier for teenagers to get and their repayment terms are more generous.For the first time in five years, rates on student loans, for money borrowed from July 1 through June 30 of next year, dropped modestly.Undergraduate loans now carry a rate of 6.39 percent, down from 6.53 percent. Rates on loans for graduate and professional students eased to 7.94 percent, from 8.08 percent, while rates on PLUS loans — extra financing available to graduate students and to parents of undergraduates — fell to 8.94 percent, from 9.08 percent.These rates reset on July 1 each year and follow a formula based on the 10-year Treasury bond auction in May.Private student loans are a bit of a wild card. Undergraduates often need a co-signer, rates can be fixed or variable and much depends on your credit score.Where and how to shop: Many banks and credit unions want nothing to do with student loans, so you’ll want to shop around extensively, including with lenders that specialize in private student loans.You’ll often see online ads and websites offering interest rates from each lender that can range by 15 percentage points or so. As a result, you’ll need to give up a fair bit of information before getting an actual price quote.Ron Lieber and Ann Carrns contributed reporting.July 30, 2025, 8:37 a.m. ETThomas Built school buses being assembled this month at a plant in High Point, N.C. Companies that rely on imported materials to manufacture goods domestically have been anxious about tariffs.Credit...Travis Dove for The New York TimesEconomic growth softened in the first half of the year, as tariffs and uncertainty upended business plans and scrambled consumers’ spending decisions.Gross domestic product, adjusted for inflation, increased at a 3 percent annual rate in the second quarter, the Commerce Department said on Wednesday. That topped forecasters’ expectations and appeared to represent a strong rebound from the first three months of the year, when output contracted at a 0.5 percent rate.But both those figures were skewed — in opposite directions — by big swings in trade and inventories caused by President Trump’s ever-shifting tariff policies. Taken as a whole, the data from the first six months of the year tell a more consistent story of anemic, though positive, economic growth.Many forecasters expect a further deterioration in the months ahead, as tariffs work their way through supply chains, federal job cuts filter through the economy and stricter immigration policies take a toll on industries that rely on foreign-born workers.“We don’t think we’ve seen the full effects from tariffs yet,” said Michael Gapen, chief U.S. economist for Morgan Stanley. “I don’t see how we power through without a soft patch at least for a little while.”But the economy has repeatedly defied such gloomy predictions in recent years, and some forecasters believe it could do so again. Unemployment remains low, measures of consumer confidence have rebounded and tariffs have so far done little to push up prices overall. The tax-and-spending bill passed by Congress this month could also provide a short-term boost to economic activity, although many budget experts have warned that it could pose a long-term risk by adding trillions to the federal debt.“We’re going to look back and either say, ‘Wow, the economy was super resilient and these things didn’t matter as much as we thought they would,’ or we’re going to say, ‘Yeah, you could kind of feel it was weakening,’” said Louise Sheiner, an economist at the Brookings Institution. “I think we just don’t know.”Officials at the Federal Reserve will be weighing those dueling narratives at their meeting on Wednesday. They are widely expected to hold interest rates steady, but a flood of economic data this week could help decide whether and when they will cut rates again.Mr. Trump on Wednesday seized on the G.D.P. data to renew his demand that the Fed lower rates. In a social media post, he said that the report was “WAY BETTER THAN EXPECTED!” and that Jerome H. Powell, the Fed chair, “MUST NOW LOWER THE RATE.”“Let people buy, and refinance, their homes!” Mr. Trump wrote.The data released on Wednesday included evidence to support both sides of the debate.Consumer spending, the bedrock of the U.S. economy, grew at a 1.4 percent annual rate in the second quarter. That was an acceleration from the 0.5 percent rate in the beginning of the year, but well below the 2.8 percent growth in spending in 2024. That could be a sign that consumers, whose resilience has helped keep growth on track during a tumultuous economic period, are finally showing signs of strain.High interest rates also continue to weigh on the housing sector, which contracted for the second straight quarter. And inflation continues to cool: Consumer prices rose at a 2.1 percent rate in the second quarter, barely above the Fed’s long-term target of 2 percent.If consumers continue to pull back and inflation remains tame, that could lead the Fed to restart rate cuts in the fall, especially if the labor market shows signs of weakening. But the data on Wednesday also included hints of why some policymakers remain cautious.After-tax incomes, adjusted for inflation, grew at a 3 percent rate, suggesting the strong job market could allow consumers to keep spending. And “core” consumer prices, excluding volatile food and energy categories, rose at a 2.5 percent rate, even without much effect from tariffs.Spending data for June, which will be released on Thursday, could give a clearer picture of how consumers are responding to the mixed economic signals. Aditya Bhave, an economist at Bank of America, said he will be paying particular attention to spending on discretionary services, such as air travel and hotel stays, for signs of whether consumers are pulling back or powering ahead.“I really think about discretionary services as the canary in the coal mine,” Mr. Bhave said.The big swing in the overall G.D.P. figures between the first and second quarters paint a misleading picture of the economy. That is because of the unusual patterns in trade and spending caused by Mr. Trump’s tariff policies, and by the confusing way that economic activity is measured.When Mr. Trump returned to office, businesses and consumers anticipated that tariff rates would rise and rushed to stock up on foreign goods and materials before new duties took effect. That resulted in a surge in imports at the start of the year. That pattern reversed in the second quarter because many companies had already imported the goods they needed.Big swings in imports can result in confusing G.D.P. numbers because imports, in principle, shouldn’t be counted in the figures at all.G.D.P., as the name suggests, is meant to measure only goods produced domestically. But rather than measure production directly, the government counts all the goods and services sold in the country, and then subtracts the ones that were made overseas. (It also adds in exports, which are produced domestically but sold to foreign buyers.)That means that, in theory, imports should be offset elsewhere in the data, either showing up as spending or as unsold products held in inventory. Spending and inventories are both counted as part of G.D.P.In practice, though, the government is good at counting both imports and consumer spending, but often must rely on rough estimates for inventories, especially in preliminary data. The G.D.P. figures showed that imports subtracted nearly 5 percentage points from G.D.P. growth in the first quarter, then added more than 5 points in the second. Shifts in inventories offset those swings, but only partly, adding a bit less than 3 points to first-quarter growth and subtracting a bit more than 3 points to the second quarter.Many economists expect the data to be revised in the coming months to show bigger moves in inventories to more fully cancel out the swings in imports. That would result in less volatility in the quarterly G.D.P. figures.Measures of underlying activity, which remove the volatile trade and inventory components, show that growth slowed sharply in the first quarter, then weakened further in the second.“Headline numbers are hiding the economy’s true performance, which is slowing as tariffs take a bite out of activity,” Kathy Bostjancic, chief economist for the insurer Nationwide, wrote in a note to clients.The second-quarter figures will be revised at least twice in coming months as more complete data becomes available. Those revisions could be significant: Many economists initially dismissed the contraction in G.D.P. in the first quarter because consumer spending was solid and measures of underlying growth were strong. But subsequent updates made the first quarter look significantly weaker than the preliminary data had suggested.