President Donald Trump has confirmed his intention to keep Federal Reserve Chairman Jerome Powell in his position, despite expressing dissatisfaction with Powell’s monetary policy decisions. Following a meeting at the White House on May 29, Trump reiterated his desire for lower interest rates to bolster the economy and increase competitiveness against countries like China. However, Powell emphasized that he would not factor in political pressures when determining monetary policy.
The meeting, which Trump requested, was aimed at discussing economic developments, including growth and inflation. Powell stated that any adjustments to interest rates would depend entirely on incoming economic data and the overall economic outlook. The Federal Reserve had recently maintained its key interest rate, citing uncertainties in the economy, and has not indicated plans to lower it in the near future.
White House Press Secretary Karoline Leavitt confirmed that Trump believes Powell is making a mistake by not cutting rates. Previously, criticism from Trump towards Powell had included suggestions about the possibility of his firing, which the president later dismissed, stating he had “no intention” of doing so. Trump’s concerns about the Fed’s direction can be traced back to shortly after he appointed Powell in 2018.
Powell has cautioned about the potential consequences of tariffs on inflation and employment, highlighting that while interest rate cuts are typically used to stimulate a weakening economy, raising rates is a measure taken to control inflation. As the Fed prepares for its next meeting in mid-June, it continues to face scrutiny over its policy decisions.
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