Trump Critiques Powell: Why a Rate Cut Might Not Happen After Wednesday’s Fed Meeting

With the Federal Reserve poised to announce its latest interest rate decision, President Donald Trump has shared his critical views on Chair Jerome Powell. He has repeatedly called Powell "stupid" and believes the Fed’s borrowing rate should be lower—at least by two percentage points.

Just outside the White House, Trump expressed doubt that there would be any rate cuts, emphasizing that while Europe has lowered rates multiple times, the U.S. has not seen any reductions. He claims that this reluctance is costing the U.S. economy significantly. According to Trump, higher interest rates are leading to "hundreds of billions" in extra financing costs that could be alleviated with a few adjustments.

As of now, experts predict no cuts during the current meeting, with the Fed targeting a borrowing rate of 4.25%-4.50%. Powell and his team are cautious, given the complexities of the economy and the long-term effects of tariffs. Inflation rates have shown little change since the tariffs were put in place, but various factors are influencing this stability.

Interestingly, Trump mentioned that he does not believe inflation will significantly rise despite Powell’s concerns. Recently, the two met at the White House, but details of their conversation remain unclear. Powell has stated he won’t be swayed by political pressure, despite the growing calls for change from various administration officials.

The Fed’s decisions have wide-ranging implications. A study from the Brookings Institution suggests that changes in interest rates can significantly impact growth, borrowing, and consumer spending. So, while the debates continue, the conversation around the Fed’s actions remains vital to the nation’s economic health.

As we look ahead, Powell’s term lasts until May 2026. Trump has hinted at appointing a successor, stating he could do a better job than the current chair. This ongoing back-and-forth highlights the intersection of politics and economic policy, shaping the landscape for years to come.

For more detailed insights, you can check the report from Brookings.

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