Fed Chair Powell Resists Trump Pressure To Cut Interest Rates

On May 29, President Donald Trump met with Federal Reserve Chair Jerome Powell to urge a reduction in interest rates, arguing that current policy puts the U.S. at an economic disadvantage compared to countries like China. Powell responded by reaffirming the Fed's commitment to making monetary policy decisions based solely on economic data and without political influence, emphasizing the importance of Fed independence. The meeting, the first face-to-face since November 2019, underscored ongoing tensions between Trump’s push for accommodative policy and the Fed’s cautious approach amid uncertainties such as tariffs and inflation. White House Press Secretary Karoline Leavitt confirmed Trump’s private and public criticisms but noted there was no discussion about removing Powell from his position. The Federal Reserve maintained that future interest rate decisions would depend on incoming economic information, focusing on the dual mandate of maximizing employment and stabilizing prices. This encounter highlights the persistent friction between political pressures and central bank autonomy in shaping U.S. monetary policy.