Fed Chair Jerome Powell resists Trump’s rate cut demand, says ‘monetary policy will be based on non-political analysis’

ederal Reserve Chair Jerome Powell assured US President Donald Trump in a meeting held at the White House on Thursday (May 29) that the Fed would “set monetary policy, as required by law, to support maximum employment and stable prices and will make those decisions based solely on careful, objective, and non-political analysis.”

Trump presses for rate cuts

The assurance came during their first face-to-face meeting since Powell took office in January. The meeting, confirmed by both the White House and the Fed, highlighted ongoing tensions over interest rate policy.

During the meeting, Trump reportedly told Powell he was making a “mistake” by not lowering interest rates, according to Reuters. White House spokeswoman Karoline Leavitt said, “The President did say that he believes the Fed chair is making a mistake by not lowering interest rates, which is putting us at an economic disadvantage to China and other countries.”

Fed emphasises data-driven policy

In a post-meeting statement, the Federal Reserve reiterated its independence. “Chair Powell did not discuss his expectations for monetary policy,” the Fed said, “except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook.”

Interest rates hold steady—for now

Earlier this month, the Fed maintained its policy rate in the 4.25%–4.50% range, where it has remained since December. Policymakers have signaled the possibility of holding rates steady for several more months, awaiting clarity on economic data and tariff policies.

Minutes from the Fed’s May meeting reveal growing concern that trade tariffs and policy uncertainty could either slow economic growth or fuel inflation.

Markets anticipate rate cuts this fall

Despite the Fed’s cautious stance, global brokerages are pricing in a potential rate cut in July.

A history of friction between Trump and Powell

Trump elevated Powell to Fed Chair during his first term but quickly grew frustrated with Powell’s rate-hiking decisions. Although Trump has expressed a desire to see Powell removed, he has also stated he does not plan to fire him.

Powell’s return to the White House

This meeting marked Powell’s first visit to the White House since November 2019, when he met with Trump and then-Treasury Secretary Steven Mnuchin. His most recent meeting with a sitting president was with Joe Biden and Treasury Secretary Janet Yellen.

Powell has clarified that such meetings are always at the president’s request and never initiated by the Fed.

(With Reuters inputs)