Fed Officials Debate Interest Rate Cuts Amid White House Pressure

Federal Reserve Governor Stephen Miran, an appointee of President Trump, has sparked debate by advocating for a significant interest rate cut to around 2.5%, diverging from other Fed officials who prefer a more cautious approach. Miran and President Trump emphasize the need for lower rates to support the labor market amid concerns about declining immigration, tariff impacts, and an aging population. However, several other Fed officials, including St. Louis Fed President Alberto Musalem and Atlanta Fed President Raphael Bostic, express skepticism about further cuts, highlighting ongoing policy divisions within the Federal Open Market Committee. The Fed recently cut its benchmark rate to 4.00–4.25%, the first cut under Trump's administration, but the White House continues to pressure for looser monetary policy, raising concerns about the Fed's independence. Upcoming speeches by Fed officials and key economic data releases are being closely watched by markets amid this political and economic tension. Additionally, the Trump administration's tightening of immigration policies, particularly on H-1B visas, adds complexity to labor market dynamics and investor sentiment.