Powell leaves the door open for interest rate cuts still to come this year, regardless of what happens in the election

• The Federal Reserve held interest rates steady during its July meeting.
• However, some economists predict the Fed will cut interest rates in September.
• Powell said there are scenarios that would allow the Fed to cut rates in September.

The nation's central bank didn't give interest rate relief to Americans — yet.

On Wednesday, the Federal Open Market Committee announced it would be leaving interest rates unchanged, continuing the pause that began last fall. The decision comes after continued positive economic data: the consumer price index, which measures inflation, rose 3.0% year over year in June, cooling down from May's 3.3% reading.

And with the labor market slowing down while avoiding a recession, Powell said there are scenarios that would allow the Fed to cut rates in September.

"The question will be whether the totality of the data and the evolving outlook in the balance of risks are consistent with rising confidence in inflation and maintaining a solid labor market," Powell said during the Wednesday press conference. "If that test is met, a reduction in our policy rate could be on the table as soon as the next meeting in September."

While he stressed that he will not say whether the Fed will cut rates in September, he said that he "can imagine a scenario in which there would be everywhere from zero cuts to several cuts, depending on the way the economy evolves."

Powell has not confirmed that rate cuts are in the cards in September, instead maintaining that the Fed needs continued positive economic data before it feels confident to lower interest rates. However, predictions point to a rate cut — CME FedWatch , which estimates probabilities of interest rate changes based on the markets, showed markets think it's far more likely than not that rates will ease.

"There continues to be positive indicators that this may be the last meeting before we see an interest rate reduction at the next Fed meeting in September, with the possibility of a second rate reduction for 2024 still on the table," Michele Raneri, vice president and head of US research and consulting at TransUnion, said in a Tuesday statement.

The high interest rates have meant it's more expensive for Americans to borrow money for things like mortgages, credit cards, and auto loans.

Still, some Republican lawmakers — and former President Donald Trump — have accused Powell of intentionally choosing to lower rates before the presidential election to help Democrats win. During a February interview with Fox News, Trump said that Powell is "going to do something to probably help the Democrats, I think, if he lowers interest rates," adding that "it looks to me like he's trying to lower interest rates for the sake of maybe getting people elected."

Some Democratic lawmakers pushed Powell to ignore the Republican critiques of the Fed's potential timeline for rate cuts. On Wednesday, Sens. Elizabeth Warren, John Hickenlooper, and Sheldon Whitehouse sent a letter to Powell saying that failure to cut rates "would indicate that the Fed is giving in to bullying, and is putting political considerations ahead of its dual mandate to 'promote maximum employment and stable prices.'"

Powell has frequently said that the Fed is not political and the decisions the central bank makes are purely based on economic data.

"We don't change anything in our approach to address other factors, like the political calendar," Powell said on Wednesday. "Congress has, we believe, ordered us to conduct our business in a non-political way at all times, not just some of the time. I'll say this, too: we never use our tools to support or oppose a political party, a politician, or any political outcome."