Yesterday, Federal Reserve Chair Jerome Powell resisted pressure from the White House, stating that the central bank must remain vigilant due to the risk of inflation.

The Federal Open Market Committee voted on Wednesday to keep interest rates unchanged for the fifth consecutive time. However, the meeting stood out not only for policy stability but also for a rare display of internal disagreement within the FOMC — for the first time in over three decades, two Fed governors dissented. This double dissent underscores rising tensions within the Committee over the appropriate course of monetary policy.

On one hand, holding rates steady reflects concerns about a potential slowdown in economic growth and risks tied to tighter financial conditions. On the other hand, the dissenters likely emphasized persistently high inflation and the need for more aggressive measures to contain it. The split within the FOMC will undoubtedly add to market uncertainty. Investors will closely monitor upcoming statements from Committee members and economic data to assess how these developments may influence future rate decisions. Given the polarization of views, each upcoming FOMC meeting is likely to attract heightened attention and speculation. These events are expected to significantly impact the economy and financial markets in the coming months.

At the press conference following the decision, Powell stated that the Fed is currently in a favorable position, considering the continued uncertainty surrounding President Donald Trump's tariffs and their economic effects. His statement was carefully balanced — dampening expectations of a rate cut in September while not ruling it out. This surprise led to a sharp sell-off in the U.S. stock market and strengthened the dollar against several risk-sensitive assets, including the euro and the pound.

"A reasonable base case is that the impact on inflation may be transitory, reflecting a one-time price level adjustment, but it is also possible that the inflationary effects could be more persistent — and that is a risk we need to assess and manage," Powell said. He noted that several key reports, including two months' worth of employment and inflation data, are expected before the September meeting. "We will take that information — and all other available data — into account when making our September decision," he added.

Following the press conference, interest rate futures showed that traders had revised the probability of a rate cut in September down to roughly 40%, compared with about 60% before the decision.

"We are still far from seeing stability," Powell said of the trade negotiations. "Yes, we're learning more. But it does not appear that we are close to the end of the process," he added.

Looking ahead, Powell emphasized that the Fed would ensure tariffs do not trigger significant inflation. He added that policymakers are trying to balance premature rate cuts — which could prevent inflation from reaching the Fed's 2% target — with delayed action that could harm the labor market. "We are trying to navigate this effectively," Powell said. "But in the end, there should be no doubt that we will do whatever it takes to keep inflation under control."

EUR/USD Technical Outlook Buyers now need to focus on regaining the 1.1460 level. Only then will it be possible to target 1.1500. From there, the pair may push toward 1.1535, though doing so without support from major market participants may be difficult. The most distant bullish target lies at the 1.1570 high. In the event of a pullback, strong buying interest is expected around 1.1410. If this level fails to attract buyers, it would be advisable to wait for a retest of the 1.1370 low or consider long positions from 1.1345.

GBP/USD Technical Outlook Pound buyers need to break above the nearest resistance at 1.3275 to target 1.3310, though surpassing this level may prove challenging. The final bullish target lies at 1.3340. If the pair declines, bears will attempt to regain control at 1.3230. A successful break below this range would deal a serious blow to bullish positions and could drive GBP/USD down to 1.3180, with the potential for an extended move toward 1.3125.