Federal Reserve officials are split into three camps over what economic evidence they need before resuming rate cuts, with two governors prepared to dissent—an event that hasn't happpened in more than three decades. President Trump has hammered Fed Chair Jerome Powell for skipping interest-rate cuts so far this year. While Powell can steer the policy decision, other policymakers are also part of each rate determination. The key focus on Wednesday will be whether Powell offers any hint of a September rate cut, and whether in the coming days and weeks his colleagues begin laying the groundwork for a cut at their next gathering. 

Federal Reserve officials expect they will need to resume lowering interest rates eventually—they just aren’t ready to do so Wednesday. The questions dividing them center on what evidence they need to see first, and whether waiting for that clarity turns out to be a mistake.

The central bank had a united front when officials paused rate cuts earlier this year after President Trump’s tariffs raised fears of renewed inflation. But with tariff-related price increases proving milder than many feared and signs that hiring may be softening, officials on the rate-setting committee are now fractured into roughly three camps over whether to resume easing.

• The Fed Chair Doesn’t Set Rates by Himself. Here Are the Other Voting Members.

It has been more than three decades since two Federal Reserve Board governors dissented on an interest-rate decision at the same Fed policy meeting. That kind of internal division is rare, and markets pay attention to it. A double dissent could happen again at the Federal Open Market Committee meeting this week. Fed Governor Christopher Waller and Vice Chair for Supervision Michelle Bowman—appointees of President Donald Trump—have both said publicly that they would support a rate cut. If the committee decides to hold the federal-funds rate steady at a targeted range of 4.25% to 4.5%, as is widely expected, but Waller and Bowman vote to ease, it would mark the first time since 1993 that two governors on the board broke ranks at the same meeting. (Barron's) 

• Trump’s Tariffs: Where He Started, What He Threatened, Where He Ended Up
• How Trump Got the Upper Hand Over the EU on Tariffs

Banks are making credit cards harder to get—for some customers. Lenders opened fewer cards in the second quarter, according to earnings reports from major issuers. They raised qualification requirements for lower-end customers that tend to be at greater risk of missing payments. It was a different story for higher-end customers, which are increasingly propelling the U.S. economy.

8:30 a.m.: Advance Economic Indicators Report
9 a.m.: Johnson Redbook Retail Sales Index
9 a.m.: U.S. Monthly House Price Index
9 a.m.: S&P CoreLogic Case-Shiller Indices
10 a.m.: Consumer Confidence Index
10 a.m.: Job Openings & Labor Turnover Survey
7 p.m.: U.S. Federal Open Market Committee meeting

7 a.m.: MBA Weekly Mortgage Applications Survey
8:15 a.m.: ADP National Employment Report
8:30 a.m.: Advance estimate GDP
9:45 a.m.: Bank of Canada interest rate announcement
10 a.m.: Metropolitan Area Employment and Unemployment
10 a.m.: Pending Home Sales Index
2 p.m.: U.S. interest rate decision

The Federal Reserve is expected to stand pat on rates at Wednesday's policy meeting, but interest-rate cuts will likely come, says Thornburg Investment Management's Christian Hoffmann. "I would expect one or two cuts this year, but if we continue to have the same amount of certainty around tariff and trade policy, it makes the framework for cutting particularly tough," the head of fixed income says. There have been some favorable inflation prints lately, but not on the PCE, which is the Fed's preferred inflation gauge, he says. The labor market continues to look strong, making it tough to argue for a significant rate cut, he says. —Emese Bartha

U.S. tariffs are likely to drive U.S. inflation higher and eurozone inflation lower, causing the euro to depreciate against the dollar, Barclays analysts say in a note. The inflation outlook raises the possibility of the European Central Bank cutting interest rates by more than currently expected while the U.S. Federal Reserve could hold back, they say. "A gap has opened up between rate differentials and the euro as a common currency has become expensive," Barclays says. — Miriam Mukuru

• Business leaders on both sides of the Atlantic breathed a sigh of relief that the U.S. and European Union had averted a bruising trade war with their agreement on tariffs and investment. Now attention is shifting to assessing the deal’s winners and losers.
• The European Union has promised President Trump a $750 billion shopping spree on American energy. Making good on that pledge will be a tall order.
• Home buyers and builders in Canada are in retreat, adding to the woes of an economy struggling under the weight of President Trump’s tariffs.
• Ireland’s economy contracted in the three months through June following a first-quarter surge, and faces an uncertain future as U.S. tariffs rise, while the government plans to ramp up its investment spending.
• The Spanish economy gained a little pace in the three months through June, a sign of resilience for a eurozone facing a slowdown as higher U.S. tariffs bite.
• Japan is playing down the risks from its trade deal with President Trump after the White House said the U.S. would direct $550 billion in investments by Japan and keep 90% of the profit.
• Companies are raising tens of billions of dollars, not to invest in their businesses or hire employees, but to purchase bitcoin and more obscure cryptocurrencies.

WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ’s global team of reporters and editors. This newsletter was compiled by news associate Roshan Fernandez in New York. Send your tips, suggestions and feedback to roshan.fernandez@wsj.com.