The Federal Reserve kept short-term interest rates at a level of 4.25 percent to 4.5 percent on Wednesday, but the vote saw the first double dissent from Fed board officials in more than 30 years.

Nine members of the Federal Open Market Committee (FOMC) agreed to keep rates where they are.

But Fed Vice Chair of Supervision Michelle Bowman and Gov. Christopher Waller — who are both in the running for President Trump’s nomination to replace Fed Chair Jerome Powell — voted to lower them, following an immense pressure campaign from the president.

It was the first time two members of the Fed board, which usually votes unanimously, dissented in more than 30 years. All members of the Fed board are part of the FOMC, which also includes a rotation of regional reserve bank officials.

Powell downplayed the significance of the dissents during a Wednesday press conference, praising Bowman and Waller for laying out clear and logical cases for their decisions during the meeting.

“This was quite a good meeting all around the table,” Powell said. “People thought carefully about this and put their positions out there.”

“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 [interest rates] in my way of thinking,” Powell continued.

“But we had two dissenters …. you want that clear thinking — expression of your thinking, and we certainly had that today.”

Some “will be keen to accuse Bowman and Waller of being partisans, easily swayed by Trump’s browbeating,” former Fed analyst Skanda Amarnath wrote on social media. “They’ve always been nonpartisan in their analysis and deserve to be taken seriously.”

The continued interest rate pause keeps rates where they have been since January and was in line with expectations from financial markets. Interest rate futures contracts put the odds of a pause at 96.9 percent just before the decision.

The hold-steady comes as prices have started to tick back upward — likely a result of tariffs imposed as part of President Trump’s trade war.

The consumer price index slid up in June to a 2.7 percent annual increase from 2.4 percent in May. The personal consumption expenditures price index inched up to a 2.3 percent annual increase in May from 2.2 percent in April.

Economists have attributed the moves to businesses passing along cost increases coming from tariffs. Cost increases have shown up in electronics, home furnishings and apparel — all items that are sensitive to import taxes.

Tariffs notwithstanding, underlying inflation is still showing signs of life. That’s arguably more important to the Fed, though Powell said earlier this month that the central bank would have started cutting rates if it weren’t for Trump’s import taxes.

Powell said Wednesday that despite a rash of recent White House trade deals, there is far too little evidence by which to judge the economic impact of the tariffs.

“You have to think of this as still quite early days, and so I think what we’re seeing now is substantial amounts of tariff revenue being collected,” Powell said.

“We know from surveys that companies feel that they have every intention of putting this through to the consumer, but truth is, they may not be able to in many cases. We’re just going to have to watch and learn empirically,” he said.

Along with a robust June jobs report, which showed the economy adding a seasonally adjusted 147,000 jobs and the unemployment rate ticking down to 4.1 percent, upward price pressures are continuing independent of White House trade moves.

“Inflation — while much more subdued than immediately following the pandemic — has ranged between 2.3 and 3.0 percent since last June, and remains well above the Fed’s 2.0 percent target level,” Jerry Tempelman, a former New York Fed analyst and a vice president at Mutual of America Capital Management, wrote in a commentary.

“Monthly job growth has been much more robust than it was last summer, which had prompted the Fed to ease policy three times in 2024,” he added.

Both Bowman and Waller made the case for cuts prior to this week’s meeting.

Waller favored a cut on the basis of tariffs, slower growth and a job market he described as close to “stall speed.”

“While the labor market looks fine on the surface, once we account for expected data revisions, private-sector payroll growth is near stall speed, and other data suggest that the downside risks to the labor market have increased,” he said earlier this month.

The continued pause comes amid immense pressure on the central bank from Trump to lower interest rates, even as his tariffs contribute to increasing inflation.

Trump appeared to ambush Powell over a construction cost overrun last week on live television during the duo’s rare joint appearance at a Fed facility renovation site.

Trump told Powell on Thursday that the renovation cost overrun, which had been criticized by White House officials, was more than previously reported, producing a document to support the claim. Powell scanned the document and dismissed it as including estimates for an already completed project.

Despite the tensions, Powell said Wednesday it was an “honor” to host Trump for the tour.

“It’s not something that happens very often at the Federal Reserve to have a president come over,” Powell said Wednesday after the bank held interest rates steady.

Powell demurred when asked if Trump’s interest in the renovations was driven by the president’s displeasure with Fed interest rate policy. The chair instead touted his and Trump’s shared desire to wrap up the renovations as soon as possible.

“I was quite pleased to have the President say multiple times that what he really wanted to see was us getting this construction completed as soon as possible. That is our focus, and that’s what we’re going to,” Powell said.

The continued pause followed a robust report for second-quarter economic growth from the Commerce Department on Wednesday.

It showed gross domestic product increasing by 3 percent after the economy contracted by a 0.5 percent in the first quarter.

The positive jump was mostly due to an decrease in imports, reflecting irregularities in trade flows prompted by Trump’s trade war.

Economists were less than reassured by the headline number, even calling it a “mirage.”

“This apparent strength is an economic mirage reflecting a sharp pullback in imports after the tariff-driven front-loading of demand in the first quarter,” EY-Parthenon economist Gregory Daco wrote in an analysis.

“Stripping out the noise, the US economy expanded at a muted 1.2 percent average pace in the first half of the year, revealing soft underlying private sector demand.”

Updated at 3:53 p.m. EDT.