President Donald Trump is intensifying pressure on the Federal Reserve ahead of its key policy meeting this week, urging the central bank to cut interest rates. Despite market expectations that the Fed will keep rates unchanged, Trump’s direct challenge to Chair Jerome Powell has heightened political tensions.
Last Thursday, during a tour of the Fed’s $2.5 billion headquarters renovation, Trump confronted Powell in front of reporters, reiterating his demand: “Interest rates have to come down.” The president has criticized the Fed’s cautious stance, arguing that tariffs’ impact on inflation will be minimal and that the economy needs support.
Although most Fed officials back Powell’s wait-and-see approach, some are starting to waver. Governor Christopher Waller hinted he may dissent if the Fed doesn’t act, citing concerns about a weakening labor market and temporary inflation pressures.
The Federal Open Market Committee has left rates unchanged throughout 2025. Markets anticipate the first rate cut to occur on September 17. Meanwhile, Powell remains under intense scrutiny—not just over rates, but also over the costly renovation project.
Former Kansas City Fed President Esther George accused Trump of trying to erode Powell’s credibility to achieve a lower rate environment. Trump, who recently considered firing Powell, appears to have stepped back, saying, “He is going to be out pretty soon anyway,” referencing Powell’s term ending in May.
All eyes are now on Powell’s press conference following Wednesday’s decision.