WSJ What’s News - Two Officials Dissent as Fed Leaves Rates Unchanged

Episode Date: July 30, 2025

P.M. Edition for July 30. As was widely expected, the Federal Reserve held rates steady for a fifth straight meeting. But in a rare move, two officials disagreed with the decision. WSJ investing columnist Spencer Jakab joins to discuss why, and what the Fed might be paying attention to ahead of its next meeting in September. Plus, President Trump announces new tariff rates for Brazil and India, and says he won’t extend the Aug. 1 deadline for countries to make trade deals with the U.S. And Amazon will pay the New York Times at least $20 million annually to license its content to train artificial intelligence. We hear from WSJ reporter Alexandra Bruell about the significance of that deal. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Two Fed officials disagree with the decision to leave interest rates unchanged. Should Jerome Powell be worried? I don't think that he's under any pressure at all. There was really more drama last week when President Trump toured the Fed building, which was undergoing a renovation project, than today. Plus, how Trump's tax mega law has reshuffled the incentives for donating to charity. And what Amazon's deal with the New York Times may mean for AI licensing. It's Wednesday, July 30th.

I'm Alex Osila for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. the top headlines and business stories that move the world today. As was largely expected, the Federal Reserve left interest rates unchanged for its fifth straight meeting. The decision came following news this morning from the Commerce Department that the U.S. economy grew by 3% in the second quarter. In a rare move, two of the 12 Fed officials in the rate setting committee dissented, seeking an immediate rate cut. It was the first meeting since 2020 in which more than

one official voted against Chair Jerome Powell and the first since 1993 in which more than one board governor dissented. Asked about this at the press conference that followed the rate announcement, Powell acknowledged the differences in the committee. I think basically this was this was quite a good meeting all around the table where people thought carefully about this and put their positions out there. As I mentioned, the majority of the committee was of the view that inflation is a bit above target, maximum employment is at target. That calls for modestly restrictive,

in my way of thinking, modestly restrictive stance of policy for now. But we had two dissenters who I think, you know, you want that clear thinking and, you know, expression of your thinking and we certainly had that today, I think all around the table. For more on the Fed, I'm joined now by WSJ investing columnist Spencer Jacob. So Spencer, two officials objected to the decision to hold rates steady. Does that add any pressure on Powell to cut rates as President Trump wants him to do? No, it doesn't. No, I don't think that he's under any pressure at all.

But it's very interesting if you look at what's happened to bond yields in the last several days There was really there's more drama last week when President Trump toured the Fed building Which was undergoing a renovation project than today, but bond yields can still move right because if you Expect the next guy or gal to cut rates Then the bond market will start reacting now and it did start reacting in the expectation that whoever was next in the role was going to be more to, you know, Trump's way of thinking about interest rates. Lyle Ornstein As I mentioned a little bit earlier, the Congress Department said the U.S. economy grew 3% in the second quarter.

How does that fit into the Fed's thinking and their assessment for future rate cuts? The Fed is going to take a very nuanced view. You look at it on face value, then in the first quarter, you surprisingly had a mildly negative number for GDP growth. This time, surprisingly, you had a stronger number. You expect the expected growth, but not as high as it was. But they're going to look into the subcomponents. And one thing that was weaker was personal consumption expenditures, which are now looking pretty weak. So there are signs of softening in the economy, but certainly not collapse, nothing alarming.

COLLEEN O'BRIEN We have a jobs report coming out on Friday. How does that fit in with the other data that the Fed's going to be taking into account before its next meeting in September? Well, that's the big one. And the last time their expectations were that the unemployment rate would rise to 4.3 percent, it actually fell to 4.1 percent. But probably the main story is the internals of that job report. And you've seen the last three reports all have, despite the headline numbers looking

okay, have shown some weakening. And so the more time that passes between liberation day and these tariffs being announced and all the uncertainty that that caused in the business community, the more you're likely to be able to say, well, it didn't do that much damage or yes, it took a while to show up and now we're starting to see it in job weakness. And so it takes time to really understand the full effects. And of course, we haven't had tariffs this high since the 1930s. And so it's difficult to model these things as well.

That was WSJ investing columnist Spencer Jacob. Thanks so much, Spencer. Thank you. U.S. stocks edged lower after Jerome Powell signaled that a September interest rate cut was far from guaranteed, disappointing investors who had been hoping for a harder shift towards easier monetary policy. The Dow gave up 0.4 percent, the S&P 500 slipped 0.1 percent, while the tech-heavy Nasdaq composite eeked out a 0.1% gain. Reporting after the bell, Meta Platforms posted 22% revenue growth in the second quarter,

showing that its core ads business remains strong at a time when the company is investing billions of dollars into AI. And Microsoft's cloud computing unit, bolstered by massive demand in artificial intelligence, pushed the tech giant to another strong quarter, with its revenue topping analyst expectations. U.S. copper prices plunged in late trading after President Trump unveiled 50% tariffs on copper products, but not on the raw material itself. According to a fact sheet, the new 50% tariffs

apply to the content of copper in each product, such as pipe fittings or electrical components, and not the entire value of the product. The administration also said it would use government authority to boost domestic copper production, including requiring 25% of high-quality copper scrap produced in the US to be sold domestically and issuing export licensing requirements to ensure domestic supplies of copper.

The Trump administration escalated its pressure campaign against Brazil, announcing sanctions against a judge overseeing criminal proceedings against former leader Jair Bolsonaro and raising tariffs on the country to 50%. Earlier, President Trump posted on social media that India will face a tariff of 25%, criticizing the country's high tariffs and its buying of Russian arms and energy. In a separate post, the President Trump said he would not extend the August 1st deadline

for countries to reach trade deals with the US. Coming up, how the new tax and spending law is upending charitable giving, and the Amazon New York Times artificial intelligence deal. Those stories and more after the break. We've talked a lot on the show about the changes that President Trump's big, beautiful tax and spending bill has ushered in. One change that hasn't gotten so much attention yet?

The impact on charitable giving. The newly signed law reshuffles the incentives for donations to charity across income brackets. WSJ tax policy reporter Richard Rubin is here to tell us more. Richard, what is different here? What did the law change? Richard Rubin, Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D.,

Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph.D., Ph their charitable donations. For people above that who do itemize their deductions, you won't be able to take any tax benefits for donations below 0.5% of adjusted gross income. So you have more reason to keep giving more once you give, but that first amount won't get you a deduction. At the very top, there's also a new limit for high income households. And then there's a new floor for corporations.

So 1% of their taxable income, that amount, won't get them a deduction. They've got to give more than that in order to get the tax break for it. So there's a whole bunch of changes in here. There are still big tax breaks for giving. They're just exactly who gets them and how is going to be somewhat different.

What does this mean for nonprofits? They're still trying to figure that out. The key thing to remember is that people give for lots of reasons. People give because they want support organizations. They give because they're feeling like their income is okay and they've got money and they're comfortable and they're willing to give some of it away. And then on the margins, they give because there's a tax incentive. Taking away the tax incentive doesn't make giving vanish, but it changes things. So I think they're just trying to really assess

at this point what this is all gonna mean. We've got a little bit of time, but in general, we should expect to see all these things kick in in 26 and then probably take a couple of years before there's a new equilibrium. Richard Rubin covers tax policy for The Journal. Thanks so much, Richard. Thank you.

We're exclusively reporting that Amazon's deal to license a broad range of New York Times content comes with a significant payday for the publisher—$20 to $25 million a year. That's according to people familiar with the matter. The financial terms of the multi-year deal, which haven't previously been disclosed, offer a window into how publishers and artificial intelligence companies are valuing news content in the midst of a seismic change in how consumers seek information online. Alexandra Bruel covers the publishing industry for the journal and joins me now. Alex, how significant is this payout really?

It's significant. $20 to $25 million is a lot of money. It's about 1% of their annual revenue. And the New York Times is big. It's their first AI-centric deal with a tech company. And it's an interesting choice. It's Amazon, the company that's not known for publishing news. It's a company that's not necessarily known for a traditional search engine.

Amazon will promote Times content and pay them money. And it could potentially set the stage for more of these types of deals between publishers and tech companies with generative AI products. Yeah, let's talk about that a little because the New York Times is far from the only company to establish one of these deals with an AI company. In fact, OpenAI has agreements with several publishers, including a deal with Wall Street Journal parent News Corp. Is there an indication that there's starting to be a template for some of these deals?

SONIA DARA, MSNBC ANCHOR This is certainly adding to that foundation for this kind of new market for AI licensing. And it's tough to say at this point what exactly these deals will ultimately look like once there is more consistency. Each deal has different sorts of financial terms. So as these generative AI products like chatbots evolve and use publishing content and need publishing content,

we'll start to get a better sense of what these deals actually look like for the larger publishers. But we're seeing the Times get in bed with Amazon and AI company, right? But we're also seeing them sue OpenAI and Microsoft over generative AI and the use of Times content. So TBD on where these things net out and whether or not this lawsuit actually changes the game.

COLLEEN O'BRIEN That was WSJ Reporter Alexander Bruel. Thanks Alex. ALEXANDRA BRUEL Thank you so much. MUSIC COLLEEN And finally, the National Weather Service has downgraded its tsunami warnings to advisories for the West Coast after a powerful earthquake struck off the coast of Russia's Kamchatka Peninsula on Wednesday morning local time. Initial fears have subsided as the tsunami waves reached U.S. territory with little threat. Tsunami waves that reached the West Coast of the U.S. early this morning peaked at 3.5

feet on the northern California coast near the Oregon border. Rapid tidal swings of 1-2 feet were recorded around Monterey Bay, where an evacuation order was issued for residents living near the water. And that's what's news for this Wednesday afternoon. Today's show was produced by Pierre Bienamé with supervising producer Michael Kosmides. I'm Alex Oscele for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.