President Trump went scorched earth on Federal Reserve Chairman Jerome Powell this week, openly mocking him and demanding immediate rate cuts to fuel economic momentum. But the Fed didn’t blink—leaving interest rates untouched and sticking to its cautious roadmap for the year ahead.
Speaking Wednesday ahead of the Fed’s decision, Trump told reporters, “He just refuses to lower rates. I don’t even think he’s political—I think he hates me.” He added, “He probably should. I call him every name in the book to try and get him to cut.”
Despite the fiery rhetoric, Powell and the Federal Open Market Committee (FOMC) held firm, keeping the central bank’s key borrowing rate steady between 4.25% and 4.5%—a level it’s been locked at since December. The Fed cited ongoing inflation concerns and mixed economic signals as justification.
However, in a slight nod to the political pressure, the Fed’s updated “dot plot” showed two possible rate cuts later in 2025. That said, the overall forecast turned slightly more hawkish: one rate cut was trimmed from both the 2026 and 2027 outlooks, and inflation projections for 2025 were revised upward.
That combination of stasis and subtle adjustment infuriated Trump, who has long seen Powell as a thorn in his side. The President’s push for immediate cuts appears to be motivated in part by growing concerns that his economic agenda—particularly his aggressive new tariff regime—is creating headwinds in the markets and contributing to fears of stagflation.
Indeed, Fed members expressed anxiety over what they described as an “ever-shifting import fee structure.” Trump’s latest round of sweeping tariffs has prompted a downgrade in the Fed’s outlook for economic growth and increased their inflation forecast, complicating any plans to ease monetary policy in the short term.
Wednesday’s decision marked the fourth straight meeting without a rate change. While some analysts hoped for a dovish pivot, it appears Powell and his team are still waiting for clearer signals before making any moves—despite growing pressure from the Oval Office.
For his part, Trump remains unrepentant. “Nobody knows this economy like I do,” he said. “Powell is slow. Always has been.”
What’s more, this standoff is likely to deepen if the Fed continues to hold back cuts heading into the 2026 midterm cycle. Powell’s refusal to play ball could increasingly become a political liability for Trump, who is trying to stimulate both the economy and voter enthusiasm.
And the implications go far beyond D.C. gridlock. With borrowing costs remaining high, Americans shopping for homes or juggling credit card debt won’t see any immediate relief. Small businesses hoping for rate cuts to spur growth will have to keep waiting. And on Wall Street, the message from the Fed was clear: the central bank still sees risk in acting too soon.
Bottom line: Trump may be the most vocal critic of Jerome Powell, but for now, the Fed Chair is brushing it off—and doing things his way. Whether or not that gamble pays off in the face of political heat remains to be seen.