Supreme Court Backs Fed Independence Amid Trump Pressure

Federal Reserve Chair Jerome Powell reaffirmed the Fed's decision to keep interest rates unchanged, emphasizing a need to fully assess the inflationary impact of recent tariffs before considering any cuts. Despite escalating public pressure from President Donald Trump for immediate and significant rate reductions, Powell maintained a cautious, data-driven approach to monetary policy. The Supreme Court has recently upheld the independence of the Federal Reserve, ruling that its governors, including Powell, cannot be removed over policy disagreements, thus limiting presidential influence before Powell’s term ends in 2026. Powell noted the U.S. economy remains strong, with inflation slightly above the 2% target and low unemployment, but uncertainties persist over the duration and impact of tariff-induced inflation. Some policymakers support Powell's stance, warning that premature changes or attempts to nominate a new chair could unsettle financial markets and complicate Senate confirmation. Powell is delivering testimony before both the House Financial Services Committee and the Senate Banking Committee this week.