The US Federal Reserve kept interest rates unchanged Wednesday, defying strong political pressure from President Donald Trump to slash borrowing costs — although divisions emerged among policymakers.The central bank’s call to hold interest rates at a range between 4.25 percent and 4.50 percent for a fifth consecutive meeting came with two dissents, marking the first time since 1993 that two Fed governors voted against a rate decision.It also came amid a flurry of data releases this week, including an estimate showing the world’s biggest economy returned to growth in the second quarter.But the uptick was heavily influenced by a pullback in imports after businesses rushed to stockpile inventory in the first quarter ahead of Trump’s expected tariffs.In announcing its decision Wednesday, the Fed cited a moderation in economic activity in the first half of the year and “solid” labor market conditions.It warned however that “uncertainty about the economic outlook remains elevated,” while inflation too is somewhat heightened.Asked about US tariff deals and whether they brought more certainty to policymakers assessing the effects of duties, Fed Chair Jerome Powell said: “It’s been a very dynamic time for these trade negotiations.””We’re still a ways away from seeing where things settle down,” he told a press conference.Trump has also vowed to impose an incoming raft of new tariff rates come Friday.Despite the dissents by Fed governors Christopher Waller and Michelle Bowman, Powell maintained that it had been a “good meeting” with thoughtful arguments around the table.- High-wire act -The dissents by Waller and Bowman, who had preferred a 25 basis points cut, were largely expected by financial markets. Both officials had earlier indicated openness to a July reduction.But KPMG chief economist Diane Swonk said: “We should expect the Fed to become less unified as we get closer to a potential cut in rates.”The hardest challenge for the central bank would be a worsening in employment alongside a pick-up in inflation, she added in a note.”The extent of those shifts is the point of contention and subject to uncertainty. That leaves the Fed in the uncomfortable position of traversing a high wire without a safety net,” Swonk added.It can take anywhere from six to 18 months for the full effects of tariffs to materialize, she said.But Swonk also flagged the “hyper-politicized environment” in which divisions are happening.Trump has lashed out repeatedly at the independent Fed chair for not lowering rates sooner — calling him a “numbskull” and “moron.”The president, citing Wednesday’s GDP figures, earlier said Powell “must now lower the rate.”The repeated attacks have fueled speculation that Trump may attempt to fire Powell or otherwise pressure him to resign early.Powell’s term as Fed chair ends in May 2026, and he defended Wednesday the independence of the central bank as having “served the public well.”- ‘Wait-and-see’ -Powell appears to be opening the door slightly to a September rate cut, although this is not guaranteed, said Navy Federal Credit Union chief economist Heather Long.”He repeatedly described a solid and resilient economy, but he acknowledged there are ‘downside risks’ to the labor market,'” she added in a note.”The July and August job reports will be key for the Fed,” Long said.Official employment numbers for July are due to be released Friday.For now, EY chief economist Gregory Daco warned that “tariff-induced price pressures” are starting to filter through the economy.Companies are citing weaker earnings and higher input costs, while job market conditions are weakening and elevated consumer prices are beginning to weigh on retail sales, he said.Swonk noted that firms which absorbed much of the initial inflation due to tariffs have been cautioning of price hikes too.And Trump has signed more orders Wednesday for fresh tariffs, including on copper products, adding to uncertainty, she said.”We think the uncertainty and balance of risks will push most of the (Fed) to remain in wait-and-see mode at least a few months longer,” said economist Michael Pearce of Oxford Economics.

Technology giant Microsoft on Wednesday said its profit soared above expectations in the recently ended quarter, driven by its cloud computing and artificial intelligence (AI) units.Microsoft reported profit of $27.2 billion on revenue of $76.4 billion, some $29.9 billion of which was brought in by its Intelligent Cloud business.”Cloud and AI is the driving force of business transformation across every industry and sector,” Microsoft chief executive Satya Nadella said in an earnings release.”We’re innovating across the tech stack to help customers adapt and grow in this new era.”Microsoft’s Azure cloud computing offerings brought in more than $75 billion for the company’s fiscal year, which ended on June 30, in an increase of 34 percent from the prior year, according to Nadella.Microsoft shares jumped about 7 percent in after-market trades that followed release of the earnings figures.”This was a slam-dunk quarter for Microsoft with cloud and AI driving significant business transformation across every sector and industry,” Wedbush Securities analyst Dan Ives said in a note to investors.”The company continues to capitalize on the AI Revolution.”Microsoft is well-positioned to make money as increasing numbers of companies ramp up efforts to take advantage of artificial intelligence in their businesses, according to Ives.Microsoft was one of the first tech giants to double down on artificial intelligence when the launch of ChatGPT in 2022 rocked the tech industry.Like its rivals, it has spent massively on building the infrastructure necessary to power the AI revolution, with analysts keeping a close eye on the return on investment.The company in January said it was on track to pump about $80 billion into capital and infrastructure in the fiscal year.Nadella has said finding enough power sources for its AI data center needs was a priority.Microsoft in early July slashed a little less than four percent of its global workforce as it seeks to cut layers of middle management and leverage new technologies.”We continue to implement organizational changes necessary to best position the company and teams for success in a dynamic marketplace,” a Microsoft spokesperson said in an email.The job cuts follow a round in May that saw about 6,000 positions culled from its global workforce.The company, which is advancing in its plans to deploy AI across all its products, said it was working to “empower employees to spend more time focusing on meaningful work by leveraging new technologies and capabilities.”

US President Donald Trump said Wednesday that imports from India will face 25 percent tariffs, while also announcing an unspecified “penalty” over New Delhi’s purchases of Russian weapons and energy.The measures will kick in on Friday, Trump posted on his Truth Social platform, adding to a bevy of other tariff hikes — some up to 50 percent — set to take effect the same day.In a separate post, Trump said the August 1 deadline “stands strong, and will not be extended.” He had previously issued multiple delays to his so-called “reciprocal” tariffs since first announcing them in early April, while instituting an interim 10 percent baseline.The 25 percent tariff on India would be marginally lower than the rate announced in April, but is higher than those of other Asian countries that have struck preliminary trade agreements with Washington.India, the world’s most populous country, was one of the first major economies to engage the Trump administration in broader trade talks.But six months later, Trump’s sweeping demands and India’s reluctance to fully open its agricultural and other sectors have so far prevented New Delhi from sealing a deal.”Remember, while India is our friend, we have, over the years, done relatively little business with them because their Tariffs are far too high, among the highest in the World, and they have the most strenuous and obnoxious non-monetary Trade Barriers of any Country,” Trump said Wednesday morning.He added that India has “always bought a vast majority of their military equipment from Russia, and are Russia’s largest buyer of ENERGY, along with China, at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE.”In addition to the 25 percent tariff, India will face “a penalty for the above,” Trump said, without any specification.Later Wednesday he told reporters that talks on the tariffs were ongoing and “we’ll see what happens,” but he did not elaborate on the penalty.The measure comes as the 79-year-old Republican has signaled he intends to tighten US pressure on Moscow to halt fighting in Ukraine and negotiate a peace deal.On Tuesday, Trump said he was giving Russian President Vladimir Putin 10 days — which would mean the end of next week — to change course in Ukraine or face new tariffs.He had previously threatened to impose “secondary tariffs” that would target Russia’s remaining trade partners — such as China and India — seeking to impede Moscow’s ability to survive already sweeping Western sanctions.Despite the tariff threat, New Delhi said it was committed to continuing negotiations on “a fair, balanced and mutually beneficial bilateral trade agreement.”- China trade talks -Shortly after announcing the tariffs on New Delhi, Trump said he had struck a deal with India’s archrival Pakistan to jointly develop its oil reserves.”Who knows, maybe they’ll be selling oil to India some day!” he posted on Truth Social.Trump has set out to upend the global economy by trying to leverage US economic power to squeeze trading partners with tariffs and force foreign companies to move to the United States.He has already announced deal outlines with five countries — Britain, Vietnam, Japan, Indonesia and the Philippines — as well as the one with the 27-nation EU.US and Chinese officials held talks this week in Stockholm on extending a trade truce that has temporarily lowered tariffs from soaring triple-digits.While no deal was announced at the meetings, both sides are eyeing an extension ahead of the August 12 deadline.Meanwhile Trump announced 50 percent tariffs on Brazil — in part to pressure the South American ally to shut down the trial of far-right former president Jair Bolsonaro on coup charges.He has also instituted separate levies targeting specific sectors, including steel, copper and automobiles.Trump has imposed many of his sweeping tariffs citing emergency authorities, which are being challenged in US court.