As Anticipated, Fed Keeps Interest Rates Steady; Two Officials Break From Consensus.

Fed Holds Rates Steady, Marking Rare Split as Pressure to Ease Builds

The Federal Reserve held interest rates steady on Wednesday, keeping its benchmark fed funds target range at 4.25%–4.50%, a move that aligned with near-universal market expectations. However, the decision revealed an unusual split within the central bank’s leadership.

Two Fed governors—Michelle Bowman and Christopher Waller—dissented, advocating for a 25 basis-point rate cut. This marks the first dual dissent since December 1993, according to Carson Group’s Chief Market Strategist Ryan Detrick, highlighting growing internal pressure to begin easing monetary policy.

“Economic activity appears to have moderated in the first half of the year,” the Fed’s statement said. “Labor market conditions remain solid, and the unemployment rate is low, but inflation continues to run somewhat above target.”

Markets reacted modestly. Bitcoin (BTC) dipped 0.5% to around $117,400 in the minutes following the announcement, while the S&P 500 and Nasdaq both slipped slightly from earlier gains.

Crypto betting platform Polymarket also saw action ahead of the decision. A trader operating under the name “Spice” wagered nearly $1.3 million on the Fed holding rates, based on a 98% implied probability. The position was later trimmed to $724,000 just before the announcement, according to data from Lookonchain and Polymarket.

All eyes now turn to Fed Chair Jerome Powell’s remarks at 2:30 p.m. ET, where analysts will be looking for signals on whether rate cuts could be on the table at the central bank’s next meeting in September. Powell has so far resisted calls for immediate action, but pressure from the White House, particularly President Trump, has intensified in recent weeks.

Ahead of today’s decision, CME’s FedWatch tool showed a 60% probability of a rate cut in September—suggesting the market is already bracing for a potential policy shift.