The odds of a rate cut at the Federal Reserve’s next meeting evaporated after a resilient jobs report for the month of June alleviated concerns about a slowing US economy.

“You are not getting a July rate cut — that is now completely off the table,” Joe Brusuelas, RSM chief economist, told Yahoo Finance.

Traders agree with that assessment. On Thursday morning, the odds of a cut at the Fed's July 28-29 meeting fell near 5% from nearly 25%, according to the CME FedWatch tool.

“The markets are speaking,” added Steve Sosnick, Interactive Brokers’ chief strategist, who told Yahoo Finance the likelihood of a Fed cut was “evaporating” in the aftermath of the latest labor market report from the Bureau of Labor Statistics.

The report showed the US economy added 147,000 nonfarm payrolls in June, more than the 106,000 expected by economists. The unemployment rate unexpectedly fell to 4.1%. Economists had expected the unemployment rate to move higher to 4.3%.
A resilient economy has been cited by Federal Reserve Chairman Jerome Powell as he argues for a patient approach to rate cuts. The strength of the US economy, he has said, gives the Fed time to assess whether President Trump’s tariffs will in fact push inflation higher over the summer.

Brusuelas of RSM said the jobs report “is feeding right into what Jerome Powell said,”...that the economy is “not in trouble right now.”
Trump has repeatedly pressured Powell to stop waiting and start cutting again, making that case again this week.

The case for looser monetary policy being made by the White House is “a tough sell,” Sosnick said. “‘The economy is great but we need rate cuts at the same time.’ That’s cognitive dissonance.'"

But Fed watchers expect the White House pressure campaign to continue. Brusuelas noted that the criticism is now being aimed not just at the Fed but at the entire Fed board.

Trump said Powell “should resign immediately” in a Truth Social post Wednesday night. On Monday he posted a note he sent to Powell telling the Fed chair "Jerome—You are, as usual, 'Too Late'" and arguing that he has "cost the USA a fortune."

Trump on Truth Social also widened his criticism to the entire Fed board: "The Board just sits there and watches, so they are equally to blame."

Fed governors Christoper Waller and Michelle Bowman have both made a case since the last Fed meeting for rate cuts in July, arguing that any inflation from tariffs will not linger.

Earlier this week Powell didn't rule out an interest rate reduction at the Fed's next meeting on July 28-29, but he noted the central bank would have cut rates by now if not for the tariffs introduced by the Trump administration.

"We went on hold when we saw the size of the tariffs and essentially all inflation forecasts for the United States went up materially as a consequence of the tariffs," he said.

The Fed lowered rates by a full percentage point in 2024 but has held rates steady so far in 2025.

"I wouldn't take any meeting off the table or put it directly on the table," Powell said when asked about the possibility of a cut in July. "It's going to depend on how the data evolved."