Overview

• President Trump has intensified public attacks on Fed Chair Jerome Powell, demanding rate cuts and calling him a 'fool' for maintaining current rates.
• The Federal Reserve held its benchmark interest rate steady at 4.25%–4.50% during its May 7 meeting, citing economic uncertainty tied to tariffs.
• Fed officials, including Christopher Waller and Beth Hammack, stressed the importance of central bank independence and the need for clear data before adjusting rates.
• Tariffs introduced by the Trump administration are creating uncertainty, with officials divided on whether they will cause short-term price increases or persistent inflation.
• The Fed faces a dual challenge of balancing inflation control with employment stability, as concerns grow over potential tariff-induced economic disruptions.