He is ignoring Trump’s demands.
On Wednesday, former President Donald Trump sharply criticized Federal Reserve Chair Jerome Powell, questioning his intelligence and urging him to lower interest rates. Despite Trump’s demands, the Fed once again chose to keep rates unchanged.
The Federal Reserve held the benchmark interest rate steady at a range of 4.25% to 4.5%, a level it has maintained since December, amid concerns over rising inflation and slowing economic growth. While the central bank did not make an immediate move, it left the door open for two potential rate cuts later this year.
Alongside its decision, the Fed released its “dot plot,” which showed some officials expect two rate reductions by the end of 2025. However, projections for 2026 and 2027 were trimmed by one cut each, suggesting a total of four rate cuts—equivalent to a full percentage point—over the next few years. The varied expectations among officials highlighted ongoing uncertainty about the future path of monetary policy, with forecasts indicating the federal funds rate could settle around 3.4% by 2027.
Trump seemed to anticipate the Fed’s reluctance to adjust rates, expressing frustration with Powell even before the announcement.
“He just refuses to lower rates. I don’t even think he’s political, I think he hates me,” Trump said, adding that he had tried everything to persuade Powell to cut rates.
This marked the fourth consecutive meeting with no change in the Fed’s key short-term interest rate. Reports suggest that officials remain concerned about the economic impact of Trump’s tariff policies.
The Fed also raised its inflation forecast for 2025 and lowered its economic growth outlook, reflecting the challenges posed by ongoing tariff adjustments. Since March, the expansion of import duties has dampened officials’ confidence in the economy, raising fears of stagflation—a troubling mix of inflation and stagnant growth.
For Trump, Powell’s stance is sure to be a source of continued dissatisfaction, and for consumers dealing with mortgages or credit card debt, the decision means higher borrowing costs remain in place.
