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3d ago

Trump-Fed Clash Intensifies as Economists Dismiss July Rate Cut

Federal Reserve plans to keep borrowing costs at 4.25%–4.50% next week in a bid to uphold policy independence in the face of mounting presidential pressure.

U.S. President Donald Trump walks on the south lawn of the White House and points up at the new flag on July 13, 2025.
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U.S. Federal Reserve Chair Jerome Powell attends the Federal Reserve's Integrated Review of the Capital Framework for Large Banks Conference in Washington, D.C., U.S., July 22, 2025. REUTERS/Ken Cedeno

Overview

  • President Trump has called on the Fed to slash interest rates to 1%, citing robust job gains, cooling inflation and record tariff revenues.
  • A Reuters poll of 105 economists between July 17–23 found unanimous expectations that rates will remain unchanged at the July 29–30 meeting.
  • More than 70% of those economists expressed worry that political interference is threatening the central bank’s autonomy.
  • While Chair Jerome Powell and most Fed officials favor waiting for more data, Governors Christopher Waller and Michelle Bowman have advocated an immediate rate cut.
  • Markets and analysts are shifting to anticipate the first rate reduction in September as officials weigh tariff-driven inflation risks and labor market strength.