Trump Pressures Powell for Rate Cuts as White House Meeting Rekindles Tensions Over Fed Independence

U.S. President Donald Trump summoned Federal Reserve Chair Jerome Powell to the White House for a face-to-face meeting—their first since Trump returned to office. The purpose of the meeting was to express Trump’s dissatisfaction with Powell’s stance on interest rates.

Trump asserted that Powell was making a “mistake” by maintaining current rates and argued that this policy decision was harming the U.S. economy, especially in comparison to competitors like China. The meeting underscored the renewed strain in their relationship, with Trump continuing his pattern of publicly criticizing the Fed chair.

Fed Stresses Data-Driven Independence as Trump Pressures for Interest Rate Cuts

Following the meeting, the Federal Reserve released a statement clarifying that Chair Powell refrained from sharing his outlook on future monetary policy. Instead, he reiterated the Fed’s commitment to making decisions based solely on economic data and within the legal framework of supporting maximum employment and stable prices.

Powell stressed that monetary policy would remain non-political and objective, regardless of outside pressures. The White House confirmed the accuracy of the Fed’s statement but reiterated Trump’s view that current policies were economically disadvantageous.

The Federal Reserve has maintained interest rates within the 4.25%–4.50% range since December and signaled in recent communications that it may hold them steady for several more months. Policymakers have expressed concern about economic uncertainty driven by trade tariffs and other external factors, which could lead to either a slowdown or heightened inflation. Market analysts anticipate a potential rate cut by September, with another possibly following in December, as economic indicators evolve.

Trump-Powell Rift Raises Questions About Fed’s Independence and Political Influence on Policy

Trump originally appointed Powell as Fed Chair during his first term but soon became disillusioned with him over rate hikes and policy decisions. At times, Trump hinted at wanting Powell removed, although he has stated he does not intend to take action. This perceived threat to the Fed’s independence has periodically shaken financial markets. However, a recent Supreme Court decision suggesting that the Fed may be uniquely insulated from such interference helped calm some of those fears.

The recent meeting marks the first time Powell has visited the White House since a 2019 discussion with Trump and former Treasury Secretary Steven Mnuchin. His last presidential engagement was with President Joe Biden and Treasury Secretary Janet Yellen. Powell has emphasized that such meetings are always initiated by the president, not the Fed, and serve as opportunities to reiterate the central bank’s statutory independence. The meeting has reignited debate over political influence on monetary policy and the importance of safeguarding institutional autonomy.