Overview

• President Trump urged Jerome Powell to cut interest rates at their May 29 meeting, arguing a lower rate would bolster the US’s competitiveness against China.
• A Federal Reserve statement confirmed the meeting was held at the president’s invitation to discuss growth, employment and inflation without addressing specific policy moves.
• Powell reiterated that the Fed will set rates based on careful, objective and non-political analysis to fulfill its mandates of maximum employment and stable prices.
• The central bank has maintained its federal funds rate at 4.25%–4.5% since December 2024, delaying cuts while it evaluates the inflationary effects of Trump’s tariff measures.
• Last week’s Supreme Court order signaled that the president likely cannot remove the Fed chair without cause, underpinning expectations for an independent monetary policy and market bets on potential rate cuts by September 2025.