The Federal Reserve defied President Donald Trump’s push for rate cuts on Wednesday, announcing it would keep interest rates steady in the 4.25% to 4.50% range—despite strong economic performance and the president’s repeated public calls for relief.
Following a two-day meeting, Fed Chair Jerome Powell told reporters the central bank remains concerned about inflation, which rose slightly to 2.7% year-over-year last month, staying above the Fed’s long-standing 2% target. Powell pointed to “Trump’s tariffs” as one of the inflationary pressures but admitted that inflation “has eased significantly from its highs in mid-2022.”
“The unemployment rate remains low, and labor market conditions remain solid,” the Fed’s statement read. “But inflation remains somewhat elevated.” Powell reiterated that no decision had yet been made for the next policy meeting in September.
The decision not to cut rates comes on the heels of a better-than-expected economic report, showing 3% GDP growth in Q2—numbers that have outpaced forecasts and fueled President Trump’s call for immediate rate cuts.
“2Q GDP JUST OUT: 3%, WAY BETTER THAN EXPECTED! ‘Too Late’ MUST NOW LOWER THE RATE. No Inflation! Let people buy, and refinance, their homes!” Trump posted on Truth Social earlier Wednesday, slamming Powell using his newly coined nickname, “Too Late.”
Trump had predicted the Fed’s move—or lack thereof—during a White House press conference before the announcement, saying, “I hear they’re going to do it in September, not today. For what reason, nobody knows.”
The president has been increasingly vocal about his dissatisfaction with Powell’s leadership, criticizing the Fed Chair as “one of the most destructive people in government.” Last week, Trump even floated the idea of firing Powell, reportedly drafting a termination letter and asking House Republicans whether he should follow through. Ultimately, Trump has signaled he will wait until Powell’s term expires in early 2026 to replace him.
The president’s frustrations may deepen following Wednesday’s vote, which also marked a rare internal split at the Fed. Two top officials—Governor Christopher Waller and Vice Chair for Supervision Michelle Bowman—broke with Powell and voted in favor of a rate cut. It’s the first time since 1993 that multiple Fed governors dissented from a rate decision.
The internal disagreement comes as the Fed is under growing pressure from the White House and Republican lawmakers to adapt to the reality of a strong economy—fueled by Trump-era tariffs, manufacturing growth, and booming consumer confidence.
Powell attempted to deflect questions about the political friction, claiming the Fed “doesn’t do advance decisions” and would consider all available data ahead of the September meeting. However, his remarks on tariffs—saying they’re “pushing up prices in some categories”—fueled accusations from Trump allies that the Fed is leaning into policy narratives shaped by globalist economists rather than prioritizing American prosperity.
The tension was on full display during the president’s recent meeting with Powell at the Federal Reserve headquarters. Trump praised the economy during the brief press availability and gave Powell a slap on the back, while reiterating his wish for lower interest rates.
“He said to me — now I don’t know if he’s going to say this publicly — he said to me very strongly, ‘The country is doing well,’” Trump recalled. “I said, ‘Congratulations, the country is doing really well.’”
Despite Powell’s reluctance to move now, many economists agree that maintaining high rates could start to drag on small businesses, the housing market, and personal debt holders. Trump has framed the issue as a working-class concern—emphasizing that millions of Americans want to refinance their homes and grow their businesses but are being squeezed by the Fed’s decisions.
With Powell’s resistance now solidified for the moment, attention turns to September. Trump and his allies are expected to keep up the pressure in the coming weeks, as the Fed walks a tightrope between elite consensus and the political realities of a surging America-first economy.
The post Federal Reserve Defies Trump Again, Keeps Interest Rates Unchanged appeared first on Real News Now.
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