Trump Blasts Powell as Fed Holds Rates at 4.25-4.5%

Equities experienced a downturn this week as US President Donald Trump intensified his criticism of Federal Reserve Chair Jerome Powell for not lowering interest rates. The Federal Open Market Committee (FOMC) announced on Wednesday that it would maintain the target range for the federal funds rate at 4.25-4.5%, citing this level as optimal for achieving maximum employment and controlled inflation.

Trump responded to the decision on his social media platform, Truth Social, labeling Powell “an American disgrace.” He argued that Powell's actions were costing the country hundreds of billions of dollars and that the Federal Reserve Board was complicit. Trump also pointed out that Europe had implemented 10 rate cuts, while the US had none, suggesting that the US should have lowered rates by 2.5 points to save billions on short-term debt, despite claiming that inflation was low.

Trump's criticism comes after a meeting between Powell and the president last month, following a series of insults from Trump. The Fed released a statement after the meeting, noting that Powell did not discuss interest rate expectations with the president. The statement emphasized that the Fed's decisions on monetary policy would be based on economic data and analysis, independent of political influence.

Powell reiterated that the Fed's policy path would depend entirely on incoming economic information and its implications for the outlook. He stressed that the Fed would set monetary policy to support maximum employment and stable prices, guided by careful, objective, and non-political analysis. This stance underscores the Fed's commitment to maintaining its independence and focusing on economic fundamentals rather than political pressures.