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Federal Reserve Stands Firm on Interest Rates Despite Trump Criticism

Fed officials emphasize independence and inflation control as Trump tariffs raise economic uncertainty.

St. Louis Federal Reserve President Alberto Musalem speaks to the Economic Club of New York, in New York City, U.S., February 20, 2025. REUTERS/Brendan McDermid/File Photo
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Federal Reserve Bank of Cleveland President Beth Hammack speaks during an interview with Reuters in New York City, U.S., April 24, 2025. REUTERS/Mike Segar

Overview

  • The Federal Reserve has maintained its benchmark interest rate at 4.25–4.50%, prioritizing inflation control over political pressure for rate cuts.
  • President Trump has intensified public attacks on Fed Chair Jerome Powell, calling him a 'fool' and urging immediate rate reductions.
  • Fed officials highlighted the inflation risks posed by new Trump administration tariffs, which could push consumer prices higher.
  • Central bank leaders, including Christopher Waller and Adriana Kugler, reaffirmed the importance of the Fed’s independence in ensuring long-term economic stability.
  • Historical examples, such as Venezuela and Turkey, underscore the dangers of political interference in monetary policy, which can lead to hyperinflation and economic crises.