President Donald Trump met with Federal Reserve Chair Jerome Powell on Thursday to discuss U.S. economic developments, including growth, employment, and inflation. The meeting, which was confirmed by the Federal Reserve, took place at the White House but was not focused on future monetary policy decisions. Powell emphasized that the path of monetary policy will depend on incoming economic data and that decisions will be based on careful and non-political analysis.
No Discussion on Interest Rates
Despite Trump’s ongoing calls for interest rate cuts, the meeting did not include a discussion of the Fed’s expectations for monetary policy. In a statement, the Fed confirmed that Powell did not address rate cuts, instead reaffirming that monetary policy decisions would be made based solely on economic conditions. “The path of policy will depend entirely on incoming economic information and what that means for the outlook,” the Fed statement said, stressing that decisions would remain objective and non-political.
Trump’s Pressure on the Fed
President Trump has been vocal about his belief that the Federal Reserve should lower interest rates to help stimulate economic growth, especially in light of global competition, particularly from China. White House press secretary Karoline Leavitt revealed that Trump privately told Powell that not lowering interest rates was a mistake, accusing the Fed of putting the U.S. at an economic disadvantage. Trump has also used his Truth Social platform to criticize Powell and demand faster rate cuts. “The consensus of almost everybody is that the Fed should cut rates sooner, rather than later,” Trump posted in May.
Market Expectations and the Fed’s Rate Decision
The timing of the meeting coincides with uncertainty surrounding trade policies, particularly tariffs. Markets are largely expecting the Federal Reserve to hold off on rate cuts until there is more clarity on the economic outlook. Futures markets indicate that the central bank may resume rate cuts in September, bypassing the June and July meetings. The Fed had lowered rates by a full percentage point in the latter part of 2024, and many analysts predict that further reductions may follow by the end of this year.
The Federal Reserve’s Commitment to Stability
At the heart of Powell’s message to the president was the Federal Reserve’s unwavering commitment to supporting maximum employment and stable prices. Powell reiterated that the Fed’s decisions would continue to be guided by a focus on long-term economic health, based on careful analysis of economic indicators. The central bank is determined to maintain independence and make decisions that are in the best interest of the U.S. economy, free from political pressure.
