The Federal Reserve maintains interest rates, although without unanimity

Federal Reserve Chairman Jerome Powell has decided to leave the interest rate at 4.25% to 4.50%, the highest level since the late 1990s, ignoring political pressure from the White House to lower interest rates.

There was, however, some news. Two governors voted against the measure yesterday, that is, they were in favor of a quarter-point rate cut. Michelle Bowman and Christopher Waller, considered close to Trump, were the "rebels." This lack of consensus hadn't occurred in 30 years.

To justify its stance, the Fed explained that "the unemployment rate remains low and labor market conditions remain solid. Inflation remains somewhat elevated." Translation: this isn't a case of adding fuel to the fire of a well-running engine. Powell considers the current monetary policy "moderately restrictive," although the gap with inflation, which stands at 2.5%, is quite large.

The US president calls Jerome Powell "slow" for not lowering the price of money.

Powell will certainly have taken into account the fact that the US economy surprised yesterday. According to official data released by the Bureau of Economic Analysis, US GDP grew 3% year-on-year in the second quarter, a better-than-expected figure.

President Donald Trump took the opportunity on social media to once again pressure Jerome Powell: “'Tardy!' Lower rates now! There is no inflation! Let people buy and refinance their homes!” the president asserted.

But Trump's enthusiasm may not be entirely justified. The interpretation of the GDP figure is mixed. For example, Powell noted that the economy grew 1.2% over the past six months, which is weak from a historical perspective. He also emphasized that there is a slowdown in consumer spending.

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"The economy experienced a temporary rebound because businesses imported less in the second quarter than in the first. But this should not be interpreted as an improvement in the trend," LPL Financial chief economist Jeffrey Roach warned in a note.

The Fed chairman again warned that tariffs will have an impact on the price of goods. "Changing rates too early or too late is inefficient," he said, demonstrating his ambiguity on the matter.

Economists believe the impact of tariffs, with average tariffs exceeding 17%, the highest level since the 1930s, will soon be felt. “More than 90% of goods imported by the US will not be replaced and will therefore continue to be imported. Importers, and consequently American consumers, will be forced to pay an additional tax to the federal treasury due to Trump's tariffs. As the prices of imported goods rise, the overall price level will also rise, reducing disposable income,” said economist Lorenzo Codogno. When this happens, will Powell, whose term ends next spring, remain in office?