{"id":297854,"date":"2025-05-05T06:48:49","date_gmt":"2025-05-05T06:48:49","guid":{"rendered":"https:\/\/news.talkwithrattan.com\/index.php\/2025\/05\/05\/ignoring-trumps-pressure-jerome-powell-led-us-federal-reserve-expected-to-keep-interest-rates-unchanged-times-of-india\/"},"modified":"2025-05-05T06:48:49","modified_gmt":"2025-05-05T06:48:49","slug":"ignoring-trumps-pressure-jerome-powell-led-us-federal-reserve-expected-to-keep-interest-rates-unchanged-times-of-india","status":"publish","type":"post","link":"https:\/\/news.talkwithrattan.com\/index.php\/2025\/05\/05\/ignoring-trumps-pressure-jerome-powell-led-us-federal-reserve-expected-to-keep-interest-rates-unchanged-times-of-india\/","title":{"rendered":"Ignoring Trump’s pressure, Jerome Powell-led US Federal Reserve expected to keep interest rates unchanged – Times of India"},"content":{"rendered":"
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The US Federal Reserve is widely expected to keep its benchmark interest rate unchanged at around 4.3% when it concludes its two-day policy meeting on Wednesday, resisting pressure from President Donald Trump and his administration to cut borrowing costs.
Despite Trump’s repeated demands for a rate cut and claims that inflation is no longer a concern, Fed Chair Jerome Powell and other officials have signalled caution, citing uncertainty over the economic impact of new tariffs. \u201cThat’s a Fed that is going to have to wait for evidence and be slow to adjust on that evidence,\u201d said Vincent Reinhart, chief economist at BNY, referencing the Fed’s previous misjudgement when it assumed post-pandemic inflation would be \u201ctransitory.\u201d
Trump has used his social media platform Truth Social to assert that there is “NO INFLATION,” citing falling gas prices and cheaper groceries. However, government data contradicts this narrative. Grocery prices have increased 2.4% over the past year, while average gas prices, though down 10% from last year, remain at $3.18 a gallon according to AAA.
Economists argue that without the inflationary threat posed by tariffs, the Fed might have considered lowering rates to stimulate borrowing and growth. \u201cYou could imagine a world where there isn’t pressure from the Trump administration and they cut rates … sooner,\u201d said Preston Mui, economist at Employ America, suggesting that political interference has made a rate cut more complicated.
Powell has acknowledged that tariffs could lead to a \u201cone-time price increase\u201d but warned they \u201ccould also be more persistent,\u201d indicating a prolonged wait before any policy shift. Some economists believe the Fed might not ease rates until September or later, though market pricing shows expectations of a potential cut as early as July if economic conditions deteriorate.
Amid this uncertainty, political scrutiny of the Fed continues to rise. Elon Musk, who heads Trump\u2019s Department of Government Efficiency, criticised the Fed for spending $2.5 billion on building renovations. \u201cSince at the end of the day, this is all taxpayer money, we should certainly look to see if indeed the Federal Reserve is spending $2.5 billion on their interior designer,\u201d he said.
The Fed defended the costs, citing post-pandemic spikes in construction expenses and local zoning laws requiring underground expansion.
Former Fed governor Kevin Warsh, seen as a possible successor to Powell, added to the criticism, stating, \u201cThe Fed’s current wounds are largely self-inflicted,\u201d and called for a \u201cstrategic reset\u201d to restore credibility.
Nevertheless, Powell maintains that the institution\u2019s independence remains intact. \u201cFed independence is very widely understood and supported in Washington, in Congress, where it really matters,\u201d he said last month.<\/div>\n