What to Watch at the Federal Reserve’s July Meeting

The Federal Reserve is set to hold interest rates steady for its fifth straight meeting on Wednesday, despite a barrage of attacks from President Trump to lower borrowing costs significantly.

Standing pat would keep interest rates at a range of 4.25 percent to 4.5 percent, a level reached in December after a series of cuts in the second half of 2024.

But after months of maintaining a wait-and-see stance to rate reductions, policymakers at the central bank are beginning to more openly debate about the right time to get going again. That decision will be based on how a raft of economic data being released this week pans out. The Fed will also take into consideration the new tariff rates that President Trump has said he will impose on Friday.

The Fed will release a policy statement alongside its rate decision at 2 p.m. in Washington. Jerome H. Powell, the Fed chair, will hold a news conference right after.

Here is what to watch for on Wednesday.

Tariff talk

Policymakers at the Fed have for months braced for Mr. Trump’s tariffs to raise inflation and weigh on economic activity. According to the latest Consumer Price Index report released this month, that started to happen more noticeably in June. The impact is still muted compared with what economists had first feared, but the question that policymakers are now grappling with is just how big the total fallout will be.

Much will depend on where tariff rates ultimately settle. In recent days, the Trump administration has gotten two of the closest trading partners, Japan and the European Union, to accept tariffs of 15 percent on their exports to the United States. The president has warned that he will impose levies of between 15 percent and 20 percent on a large swath of countries on Friday.