Trump urges Fed Chair Powell to cut interest rates, claiming it’s an economic mistake, during their first meeting in his second term.
In Short:
President Trump met with Federal Reserve Chair Jerome Powell, expressing concern over high interest rates affecting the U.S. economy. Powell maintained that monetary policy will depend on economic data and emphasised the Fed’s independence from political influence.
President Trump met with Federal Reserve Chair Jerome Powell, expressing his belief that Powell is making a mistake by not reducing interest rates.
The meeting was initiated by Trump, according to the Fed’s statement, but Powell did not disclose his specific views on monetary policy. He emphasised that future policy decisions would rely on economic data.
White House Press Secretary Karoline Leavitt confirmed that Trump conveyed his belief that not lowering interest rates puts the U.S. at a disadvantage compared to China and others. Trump has been critical of interest rates, suggesting last month he might attempt to dismiss Powell, but has since refrained from that action.
Remain independent
Powell, earlier this month, indicated that he does not seek meetings with presidents, maintaining that monetary policy decisions should remain independent. The Fed has been cautious about cutting rates, mindful of potential inflation risks from tariffs and the overall economic situation.
The meeting follows a recent court ruling that affected tariffs, increasing uncertainty for businesses. The Fed typically operates independently, crucial for long-term investment stability.
While recent Supreme Court decisions have given Trump more authority over other independent boards, the Federal Reserve’s structure protects its officials from arbitrary removal. Terminations can only occur for valid reasons, as interpreted by the courts.
