Recently, the Fed's monetary policy has sparked wide discussion. In July, the interest rate remained unchanged for the fifth consecutive time, leading to many speculations in the market. Some believe this reflects a recession in the U.S. economy, while others question the Fed's decision-making. However, through a deep analysis of the latest economic data, we can gain insight into the strategic considerations behind this policy.

Let’s first focus on a few key indicators: In June 2025, the core PCE inflation rate in the United States is 2.9%, the unemployment rate is 4.1%, and non-farm employment added 147,000 jobs. This set of data reveals the true challenge currently faced by the Fed — not an economic recession, but preventing inflation from getting out of control again.

Looking back at the experiences of 2024, the Fed had cut interest rates five times in a row, but inflationary pressures resurfaced due to the impact of tariff policies. Learning from this lesson, the Fed is now adopting a more cautious strategy. By maintaining higher interest rate levels, they are trying to set clear inflation control expectations for the market, which is a preventive measure.

Current economic data does not support the urgency of interest rate cuts. The unemployment rate of 4.1% is below pre-pandemic levels, indicating a strong job market. Tech giants like Tesla and Apple are still actively hiring skilled talents, reflecting the vitality of the economy. In this context, cutting interest rates could exacerbate inflationary pressures.

Another noteworthy indicator is the U.S. Import Price Index, which has fallen from a peak of 148.5 in 2022 to 141.8. This trend suggests that businesses are leveraging lower import costs to hedge against potential economic risks.

In summary, the Fed's current interest rate policy reflects its efforts to seek a balance between inflation control and economic growth. By keeping interest rates stable, the Fed hopes to lay the groundwork for the long-term healthy development of the economy while avoiding a recurrence of uncontrolled inflation. Although this strategy may spark controversy in the short term, it may be more beneficial for maintaining overall economic stability in the long run.