The Federal Reserve held interest rates steady Wednesday for the fifth meeting in a row as two Fed governors dissented, underscoring the division within the central bank over the potential impact of President Trump’s tariffs.

Central bank policymakers voted to maintain the Fed’s benchmark interest rate in the range of 4.25%-4.5%, as they have throughout 2025, after cutting rates by a full percentage point last fall.

Fed governors Christopher Waller and Michelle Bowman disagreed with the decision and preferred to cut rates by a quarter percentage point, the first time two governors have dissented on a monetary policy decision in more than three decades.

Fed Chairman Jerome Powell at a press conference did not offer any hints that a cut could be made at the next meeting on Sept. 16-17, noting that the Fed will be assessing a lot of data in the coming months.

​​“We have made no decisions about September,” he said.

Regarding the two Fed governors who dissented, Powell said, “What you want from everybody is a clear explanation of what your thinking is, and we had that today. This was quite a good meeting all around the table.”

The rate hold once again defies calls from President Trump and other White House officials for immediate cuts. Trump has repeatedly asked for rates to be three percentage points lower, arguing it will save on US debt interest costs while making borrowing less expensive for homebuyers.

Trump repeated that call in the hours before the Fed’s latest decision to hold, saying in a Truth Social post that “‘Too Late,’ MUST NOW LOWER THE RATE,” using his nickname for Powell. “No inflation! Let people buy, and refinance, their homes!”

Read more: How much control does the president have over the Fed and interest rates?

Powell did not budge from his general view that more time is needed to assess how Trump’s tariffs will affect the path of inflation and the strength of the US economy.

He told reporters there is still a “a long way to go” to figure out exactly what the impact of tariffs is and “you have to think of this as still quite early days.”

He also made it clear that inflation was still a concern as the Fed balances its dual mandate of stable prices and maximum employment, saying, “If you move too soon, you wind up maybe not getting inflation all the way fixed, and you have to come back. If you move too late, you might do unnecessary damage to the labor market.”

“In the end,” he added, “there should be no doubt that we will do what we need to do to keep inflation under control.”

Traders narrowed the odds of a cut in September as Powell spoke, lowering them to 47%. But Trump does expect a cut at the next meeting, telling reporters before the Wednesday rate hold was announced, “I hear they’re going to do it in September.”

The debate will likely heat up in the weeks ahead. Waller has been particularly outspoken about the case for cutting rates sooner rather than later, noting that he believes tariffs offer one-off price increases, allowing the Fed to “look through” them and refocus on the employment side of its dual mandate.

Waller has argued his view is “not political,” even though it does align with the White House perspective. He is considered among the candidates to replace Powell when the chairman’s term is up next May. Waller was appointed to his current post by Trump.

Bowman, another Trump appointee, has been making the same argument for a rate cut, noting that trade policy will only amount to “minimal impacts” on inflation and that downside risks to employment could become bigger.

Bowman’s support for an easing represents a shift in her views since last fall, when she dissented against a jumbo 50-basis-point reduction in September 2024 due to her concerns that inflation was not yet under control.

Two Fed governors haven’t dissented at the same meeting since December 1993 under then-Fed Chair Alan Greenspan, when governors Wayne Angell and Lawrence Lindsey both opposed the Fed’s bias toward looser monetary policy and wanted to hike rates.

Of the 61 meetings Powell chaired before today’s gathering, there were 16 dissents. Of the dissents, 14 were from regional bank presidents, and two were from Fed governors.

Read more: How the Fed rate decision affects your bank accounts, loans, credit cards, and investments

The decision to keep rates on hold will likely increase tensions with the White House, which is now also invoking a $2.5 billion renovation of the Fed’s headquarters as a way to question the chair’s management of the institution.

Trump played down his tensions with the Fed chair during a visit to the construction project last week, as he continued to distance himself from an effort to fire Powell. He said the Fed visit was about helping get the project finished, adding, “I don’t want to be personal.”

Later, Trump said of firing Powell: “To do that is a big move, and I just don’t think it’s necessary.”

Asked last Thursday what might lead him to back off the barrage of critiques that Trump has been leveling against Powell for weeks, the president said, “I’d love him to lower interest rates,” before patting Powell on the back.

Powell was asked about that construction tour at his press conference today. He said it was a “nice visit” and that it was an “honor” to host the president.

When asked if the focus on the construction project was actually about pressuring Powell to lower rates, the chairman noted it was “not for me to say.”

The pressure is not expected to let up this fall. In the coming weeks, Powell will wrestle with calls for an “exhaustive internal review” of the Fed’s operations and pressure from Republicans on Capitol Hill that could ramp up.

Rep. Anna Paulina Luna of Florida, a Trump ally, has formally requested that the DOJ investigate Powell for perjury over June comments about the renovations. That is seen as a long shot at best.

Perhaps more pressing is that House Speaker Mike Johnson said in an interview with Bloomberg last week that he is “disenchanted” with Powell and is even open to modifying the 1913 act that created the Fed.

That would be a major change, but it is not expected to be before Congress in the near term. The House of Representatives is now on a recess that is scheduled to last for the rest of the summer.

Republican Sen. Tim Scott — who asked Powell about the Fed’s renovations during a June 25 hearing — has also sent Powell a letter asking for more questions to be answered by Aug. 8. The senator said there were “distinct differences” between public plans about the renovation, Powell’s testimony, and what the Fed has said on its website.

Treasury Secretary Bessent has additionally called for an “exhaustive internal review” of the Fed, saying it could be Powell’s “legacy,” as he accused the central bank of mission creep in its non-monetary policy activities.

Trump has signaled his support for the effort, and some observers say this could be the most consequential change if the idea gains steam and looks to reshape how the central bank operates.

At his press conference Wednesday, Powell was asked if he worried that Trump’s ongoing pressure would weaken the Fed’s independence.

“Having an independent central bank has been an institutional arrangement that has served the public well,” he said. “As long as it serves the public well, it should continue and be respected.”

He said it gives any country the ability to make “very challenging decisions” based on the data and not “political factors.”

That, he added, is “widely understood, at least in Congress.”

Powell also offered no new signs about whether he will step down from the Fed’s Board of Governors when his term as chair is up next May. The White House prefers this outcome because it would allow it to fill another seat.

“I do not have any update for you,” he said.

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