Trump Turns Up Heat on Fed as Powell Holds Firm—No Rate Cuts in Sight

Fed Chair Jerome Powell just gave Wall Street a cold shower—rate cuts aren’t happening yet, no matter how hard Trump pushes. Here’s why the central bank won’t blink.

The Standoff: Trump’s latest public pressure campaign clashes with Powell’s data-dependent stance. The Fed’s playing the long game, even as politicians scream for stimulus.

Market Realities: Traders betting on a dovish pivot got burned—again. Powell’s sticking to the script: inflation first, politics never. (Cue the usual Wall Street tantrums.)

The Bottom Line: When the Fed finally moves, it’ll be for macroeconomic reasons—not because some ex-president turned Twitter into his personal monetary policy hotline. Classic finance theater.

Powell Says Hold On: No Rate Cut Yet

Jerome Powell isn’t rushing. At the July press conference, the Fed Chair made it clear: no decision has been made about the September meeting. While Trump wants immediate cuts, Powell says the Fed needs more time. The central bank wants to study the effects of tariffs and watch inflation trends before making a move. The benchmark rate remains between 4.25% and 4.5%. Powell admitted that some governors—Trump appointees Christopher Waller and Michelle Bowman—wanted a cut now. But the majority held firm. According to Powell, moving too soon could reignite inflation, while acting too late could damage jobs. Either way, the Fed is staying cautious—for now.

Fed Faces Growing Internal Pressure for a Rate Cut

The latest FOMC meeting revealed cracks within the Fed. For the first time in over three decades, two governors dissented in the same vote, both in favor of a rate cut. Waller and Bowman, both Trump appointees, believe the risks to jobs outweigh inflation concerns. They argue that Trump’s tariffs are one-off shocks, not long-term threats to price stability. Waller has been particularly vocal, saying the Fed should “look through” the tariffs and focus on employment. Bowman, who once opposed large rate cuts, now supports them, citing minimal inflation impact. These internal shifts highlight the growing tension at the central bank—and the influence of politics.

Will the September Meeting Bring a Rate Cut?

Markets are already eyeing the September FOMC meeting as the next battleground. According to CME FedWatch data, there’s now a 63.7% chance of a 25 basis point rate cut. That’s a major jump from the near-zero odds before July’s decision. Trump claims he’s heard that the Fed will act in September. Investors seem to be buying that narrative. But Powell remains cautious. He says more data is needed before a move. Inflation has cooled, but not enough to declare victory. If job growth weakens or consumer spending slows, a cut could finally happen. Until then, nothing is guaranteed.

Politics, Pressure, and the Future of Jerome Powell

This rate cut drama is also deeply political. Trump has made Powell a frequent target, using public visits and online posts to turn up the heat. During a recent tour of the Fed’s $2.5 billion headquarters renovation, Trump claimed it wasn’t personal. But he later added that firing Powell is “not necessary—yet.” Behind the scenes, Trump allies in Congress are pushing for investigations and even legal changes to the Fed’s structure. Powell, meanwhile, insists the Fed remains independent. He’s focused on inflation, employment, and keeping the U.S. economy stable. Whether he delivers a rate cut in September or holds firm again, Powell is clearly under the spotlight like never before.