(AURN News) — The Federal Reserve is holding its ground on interest rate policy for now, but the path forward remains uncertain as inflation shows signs of stalling and tariff pressures mount.
Minutes from the Federal Open Market Committee’s July meeting show policymakers expect two rate cuts later this year, dependent on further progress in cooling inflation.
But inflation is proving stubborn. Prices are still climbing — and not by much less than they were a year ago. The Fed’s go-to inflation measure showed overall prices up 2.5% in June. A version of the index that leaves out food and energy costs — known as core inflation — was up 2.7%. That’s about the same pace as last summer, showing little progress in slowing inflation down.
The minutes cited tariffs as a contributing factor to higher goods prices, adding pressure to an economy already stretched by rising costs. The Fed warned that disinflation — the slowing of price increases — may have stalled, raising questions about how soon rate relief could come.
Meanwhile, the credit picture remains mixed. Serious delinquencies on Federal Housing Administration mortgages stayed elevated. In contrast, most other mortgage loan types remained near historic lows. Student loan delinquencies surged in the first quarter after the expiration of the federal on-ramp period. Credit card and auto loan delinquency rates also remained elevated compared to pre-pandemic levels.
As the central bank weighs its next move, American households continue to face mounting financial pressures — from inflation to debt — with no clear end in sight.
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