Gold Retreats, Equities Down as Fed Leaves Rates Unchanged​

The US Federal Reserve held its fifth meeting of 2025 from Tuesday (July 29) to Wednesday (July 30) against a backdrop of trade tensions, spurred on by the Trump administration's tariffs.

The central bank met analysts’ expectations by holding its benchmark rate in the 4.25 to 4.5 percent range.

Chair Jerome Powell stated that although there were differences of opinion among Federal Open Market Committee members, they were clear on why they made their decisions, noting that inflation is tracking higher, but the job market remains stable.

“The labor market looks solid, inflation is above target, and even if you look through the tariff effects, we think it’s still a bit above target, and that’s why our stance is where it is,” Powell said.

The Fed chair also noted a slowing in gross domestic product, which he pointed out was up 2.5 percent in 2024. Initial data from 2025 points to a slowing in growth to 1.1 percent.

The vote to hold the rate was 9 to 2, with Governors Michelle Bowman and Christopher Waller being the dissenters who advocated for cuts. It marks the first time since December 1993 that two board members have broken with consensus.

Both Bowman and Waller were appointed by US President Donald Trump during his first term in office, with Waller being one of the front runners to replace Powell when his term as board chair ends in May 2026.

Trump has been critical of Powell in recent months, with the latest statements coming just minutes before the Fed meeting. The president has said Powell has not moved quickly enough to make rate cuts, despite data suggesting inflation has been starting to increase.

North of the border, the Bank of Canada (BoC) also held its June meeting on Wednesday.

It met expectations by holding its benchmark rate at 2.75 percent, with Governor Tiff Macklem citing resilience in the economy despite trade disputes brought on by the Trump administration in the US.

The BoC last changed its rate with a 0.25 percent cut in March to the current 2.75 percent.

Gold was down in the day’s trading, losing 1.6 percent to reach US$3,272.75 per ounce. Silver declined more sharply, losing 3.37 percent to hit US$36.93 per ounce at 3:30 p.m. EST.

The S&P 500 (INDEXSP:INX) was down, recording a 0.4 percent decline to reach 6,344.17.

For its part, the Nasdaq-100 (INDEXNASDAQ:NDX) slipped 0.17 percent to come in at 23,265 , and the Dow Jones Industrial Average (INDEXDJX:DJI) lost 0.74 percent, coming to 44,297.

Don't forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.