On May 29 local time, US President Trump held his initial face-to-face meeting with Federal Reserve Chair Powell during his second term. The meeting took place at the White House, with US Treasury Secretary Steven Mnuchin and National Economic Council Director Kevin Hassett also present. It marked the first time the two had met since November 2019.
Trump Voices Displeasure over Interest Rate Policy
According to White House Press Secretary Caroline Levitt, during the meeting, Trump made it plain that the Fed’s choice not to cut interest rates was a “wrong decision.” He argued that this decision had put the United States at a “disadvantage” in the global economic arena. “The president has been very vocal about this, both publicly and privately,” Levitt stated. Notably, the issue of potentially removing Powell from his position was not discussed. Powell’s term is set to expire in May 2026, as per the established term arrangement.
Fed’s Post-Meeting Statement
Following the meeting, the Federal Reserve issued a statement indicating that it was convened at the president’s invitation. The two sides engaged in discussions on various matters, including economic growth, employment, and inflation. The statement specifically highlighted that Powell did not reveal the future direction of monetary policy to the president. Instead, he emphasized that the policy course would be determined by the upcoming data releases and their implications for the economic outlook.
Powell also reaffirmed that he and his colleagues on the Federal Open Market Committee (FOMC) would base their decisions “solely on rigorous, objective, and non-political analysis.”
Persistent Disagreement on Interest Rates
Despite months of pressure from Trump, the Federal Reserve has maintained unchanged interest rates since the start of this year. In light of the uncertainties caused by tariff policy adjustments, policymakers believe that keeping the current interest rate level aligns with the current economic requirements. They anticipate that the relevant trade measures will suppress economic growth and drive up inflation in the short term.
Trump has long been dissatisfied with the Federal Reserve’s cautious approach. He has publicly criticized Powell on multiple occasions, accusing him of being “slow to act” and using terms like “fool” and “big waste” to attack Powell’s leadership capabilities.
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