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Trump Escalates Pressure on Powell as Fed Chair Defends Hold-Steady Policy

Powell said tariff-driven uncertainty on inflation justifies holding rates steady for now.

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Federal Reserve Chairman Jerome Powell speaks during an open meeting of the Board of Governors at the Federal Reserve, Wednesday, June 25, 2025, in Washington. (AP Photo/Mark Schiefelbein)
Federal Reserve Chair Jerome Powell at the Senate Committee on Banking, Housing, and Urban Affairs on June 25 in Washington, DC.
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Overview

  • Trump posted a handwritten note on Truth Social listing global central bank rates and urging Powell to cut U.S. rates to 1–2%, accusing him of costing the country “a fortune.”
  • The president told reporters he would not appoint a new Fed chair without a pledge for immediate rate cuts and Treasury Secretary Scott Bessent said a successor nomination could come as early as October.
  • Speaking in Sintra, Portugal, Powell reiterated that the Fed paused planned cuts after Trump’s tariffs raised inflation forecasts and that any future move will depend strictly on incoming economic data.
  • Governors Christopher Waller and Michelle Bowman, both Trump appointees, indicated they would likely support a rate reduction at the Fed’s July 29–30 meeting despite lingering tariff uncertainty.
  • The White House’s campaign tests the Fed’s legal protections for chair tenure and underscores a broader battle over central bank independence and economic governance.