This past week saw key developments in U.S. monetary policy, labor markets, and congressional ethics. Let’s break it down:
Fed Holds Rates, Eyes September Cut
On July 30th, the Federal Reserve voted 9-2 to keep its benchmark interest rate at 4.25%–4.50%, resisting political pressure from President Trump for immediate cuts. Chair Jerome Powell emphasized the Fed’s independence, noting inflation remains above the 2% target and tariffs are keeping price pressures high. Dissenters Chris Waller and Michelle Bowman — both Trump appointees — favored a July cut but will revisit the issue in September after reviewing economic impacts.
Labor Market Weakens
July’s labor report showed clear signs of slowing: nonfarm payrolls rose just 73,000, and May/June figures were revised down by 258,000 jobs. The unemployment rate ticked up to 4.2%, while sectors like manufacturing and professional services dragged the 3-month average job gain to 35,000 — sharply down from 123,000 last year. The soft data boosted investor bets on a September rate cut.
Push to Ban Lawmaker Stock Trades
A new push in Congress aims to ban lawmakers from trading individual stocks following a House Ethics Committee report flagging a representative’s spouse for profiting from insider information. While the proposal has strong public backing, it faces resistance inside Congress over pay concerns and logistical challenges. Lawmakers now face the test of balancing public trust with members’ financial freedoms.
Thanks for reading — check back next week for more market-moving updates!