WSJ What’s News Episode: Two Officials Dissent as Fed Leaves Rates Unchanged Release Date: July 30, 2025

Federal Reserve's Interest Rate Decision

In the latest Federal Reserve meeting, the committee opted to leave interest rates unchanged for the fifth consecutive meeting, aligning with market expectations. This decision follows the Commerce Department's report indicating that the US economy expanded by 3% in the second quarter. Notably, this meeting marked a rare occurrence where two of the twelve Fed officials dissented, advocating for an immediate rate cut. This is the first instance since 2020 where multiple officials opposed Chair Jerome Powell’s stance, and the first since 1993 with more than one board governor dissenting.

At the ensuing press conference, Powell addressed the dissenting votes:

“I think basically this was, this was quite a good meeting all around the table where people were, you know, thought carefully about this and, and put their positions... we had two dissenters who, I think, you know, you want that clear thinking and, you know, expression of your thinking.”
— Jerome Powell [01:23]

Expert Analysis by Spencer Jacob

The Wall Street Journal's investing columnist, Spencer Jacob, provided deeper insights into the Fed's decision and its broader implications. When queried about the dissenting officials and potential pressure on Powell to cut rates as advocated by President Trump, Jacob responded:

“No, it doesn't. No, I don't think that he's under any pressure at all.”
— Spencer Jacob [02:16]

Jacob elaborated on the recent fluctuations in bond yields and the market's reaction to expectations of future rate cuts, highlighting the nuanced view the Fed is likely to adopt. He pointed out that while the GDP growth figure was stronger than anticipated, certain subcomponents like personal consumption expenditures showed signs of weakening:

“There are signs softening in the economy, but certainly not collapse. Nothing alarming.”
— Spencer Jacob [03:06]

Looking ahead, Jacob emphasized the significance of the upcoming jobs report, noting that the internal metrics will be crucial for the Fed's future decisions:

“The main story is the internals of that job report... it's difficult to model these things as well.”
— Spencer Jacob [03:46]

Market Reactions and Company Earnings

Following the Fed's announcement, US stock markets exhibited mixed reactions. The Dow Jones Industrial Average declined by 0.4%, the S&P 500 dipped by 0.1%, while the Nasdaq Composite managed a slight gain of 0.1%.

In corporate news, Meta Platforms reported a robust 22% revenue growth in the second quarter, underscoring the strength of its core advertising business even as it invests heavily in artificial intelligence. Similarly, Microsoft’s cloud computing division exceeded analyst expectations, driven by substantial demand in AI, contributing to another strong quarterly performance.

Conversely, US copper prices experienced a sharp decline in late trading sessions. This drop was triggered by President Trump's announcement of a 50% tariff on copper products, excluding raw materials. The administration clarified that the tariffs apply to the copper content within products, such as pipe fittings or electrical components, rather than the entire product value. Additionally, measures were introduced to bolster domestic copper production, including mandates on high-quality copper scrap sales and export licensing to safeguard domestic supplies.

President Trump's Trade Policies

President Trump intensified his trade policies, targeting Brazil and India amidst ongoing geopolitical tensions. Brazil faced sanctions against a judge overseeing proceedings against former leader Jair Bolsonaro, along with a heightened tariff rate of 50%. In his social media communications, Trump criticized India's high tariffs and its procurement of Russian arms and energy, announcing a 25% tariff on Indian goods. Furthermore, he declared that the August 1 deadline for international trade deal negotiations with the US would not be extended, signaling a firm stance on trade negotiations.

Impact of New Tax Law on Charitable Giving

The recently enacted tax and spending law has significantly restructured the incentives surrounding charitable donations. WSJ tax policy reporter Richard Rubin delved into the specifics of these changes:

“For middle income households who don't itemize the deduction starting next year, they'll be able to, on top of the standard deduction, take $1,000 for an individual and $2,000 for married couples for their charitable donations.”
— Richard Rubin [07:26]

Rubin explained that while higher-income individuals who itemize deductions face stricter thresholds for tax benefits on donations, middle-income households gain additional incentives to support charities. Corporations are also affected, with new floors requiring them to donate more to qualify for tax breaks.

Addressing the implications for nonprofit organizations, Rubin noted:

“People give because they want to support organizations... Taking away the tax incentive doesn't make giving vanish, but it changes things.”
— Richard Rubin [08:22]

He anticipates that these changes will take effect in 2026, with the charitable sector adapting over the subsequent years to establish a new equilibrium.

Amazon's AI Licensing Deal with The New York Times

In a significant development within the publishing and technology sectors, Amazon has entered into a multi-year agreement to license a wide array of New York Times content. Sources indicate that the deal entails a substantial payment of $20 to $25 million annually to the publisher. WSJ reporter Alexandra Bruell highlighted the importance of this agreement:

“It's significant. $20 to $25 million is a lot of money. It's about 1% of their annual revenue... It could potentially set the stage for more of these types of deals between publishers and tech companies with generative AI products.”
— Alexandra Bruell [09:42]

Bruell discussed how this partnership mirrors other agreements between publishers and AI firms, such as OpenAI's collaborations with several publishers including WSJ's parent company, News Corp. She emphasized that while these deals are pioneering, the evolving landscape of generative AI will likely lead to varied and more standardized agreements in the future. However, ongoing litigation between The New York Times and major AI companies like OpenAI and Microsoft over content usage introduces uncertainties regarding the future framework of such collaborations.

Tsunami Warnings After Kamchatka Earthquake

The National Weather Service recently downgraded tsunami warnings to advisories for the West Coast following a powerful earthquake off Russia's Kamchatka Peninsula. Initial concerns have eased as the tsunami waves that reached US territories posed minimal threats. Waves peaked at three and a half feet along the Northern California coast near the Oregon border, with Monterey Bay experiencing rapid tidal swings of one to two feet. As a precaution, evacuation orders were issued for residents in vulnerable coastal areas.

Conclusion

This episode of WSJ What’s News provided comprehensive coverage of the Federal Reserve's monetary policy decisions, market reactions, President Trump's aggressive trade policies, transformative tax legislation affecting charitable giving, significant developments in AI and publishing partnerships, and natural disaster updates. Experts like Spencer Jacob and Richard Rubin offered in-depth analyses, while reporters like Alexandra Bruell shed light on pivotal corporate agreements shaping the intersection of technology and media.

Produced by Pierre Biennime with Supervising Producer Michael Kosmides.