The U.S. President Donald Trump met with Federal Reserve Chair Jerome Powell face-to-face for the first time since 2019, reiterating his long-standing demand to lower interest rates. However, Powell remains steadfast.
According to the White House and the Fed, Powell stated that the decision on the monetary policy requires careful analysis to support maximum employment and stable prices. As of now, there is no commitment on anything.
Since December, the Fed has maintained the interest rate at between 4.25 – 4.50%. Based on the report from the May meeting, the central bank plans to see how tariff policy affects the economy, forecasting that inflation could be higher in the long term.
As for Trump, he continues to criticize Powell for his resoluteness, calling his interest rate decision a “mistake”. He cited that by not cutting the rate, China and other countries are now having economic advantage over the U.S.
Back in the first term, it was Trump who put Powell into this position. However, their relationship deteriorates over the interest-rate decisions. Trump even said that he wants Powell being removed from the central bank but stated also that he has no plan of firing him.
The hint of the president firing the chairman upset the financial market as concerns were raised over potential political interference on the Fed’s decision. Meanwhile, the Supreme Court guaranteed that will not happen as it ruled last week that Trump did not have such authority.
