Powell Meets Trump Amid Tense Exchange Over Interest Rates and Fed Independence

Updated on 30 May 2025

In a closely watched development, Federal Reserve Chair Jerome Powell met with President Donald Trump at the White House on May 29 — their first direct conversation since Trump’s return to office. The meeting followed weeks of public pressure from Trump, who has criticized Powell for refusing to cut interest rates despite moderating inflation.

No Commitments, Just Data-Driven Policy

According to an official Fed statement, Powell did not discuss his expectations for monetary policy during the meeting. Instead, he emphasized that the path of interest rates will depend entirely on incoming economic data and its implications for inflation, employment, and growth.

Powell reiterated that he and his colleagues on the FOMC would continue to set monetary policy based on “careful, objective, and non-political analysis,” in accordance with the Federal Reserve Act. He also reaffirmed the Fed’s dual mandate: maximum employment and price stability.

White House Confirms Meeting, Adds Pressure

White House Press Secretary Karoline Leavitt confirmed the Fed’s version of the meeting but added that President Trump expressed his belief that Powell is making a mistake by not cutting rates — a move the president argues would strengthen U.S. competitiveness, particularly against China.

Trump’s position was further amplified by a social media post just hours before the meeting, in which he shared a call from Federal Housing Director Bill Pulte to lower interest rates. Pulte claimed that Trump had “crushed Biden’s inflation” and argued that the housing market would benefit significantly from lower rates.

Trump’s Past Criticism Reignites Tensions

This high-profile meeting comes amid renewed tension between the White House and the Fed. Earlier this month, Trump called Powell a “major loser” and said on Truth Social that his “termination cannot come fast enough.” Those remarks rattled markets, caused bond yields to spike, and contributed to a short-term dip in the dollar.

Though Trump later clarified he has “no intention” of firing Powell before his term expires in May 2026, the Supreme Court last week issued a ruling reinforcing that the president cannot remove the Fed Chair without cause, affirming the central bank’s institutional independence.

Fed Independence Holds — For Now

Despite political pressure, Powell’s message remained consistent: policy will not be driven by politics or personalities. The Fed is expected to release updated forecasts and policy guidance at its next meeting on June 17–18. Markets continue to price in potential rate cuts later in the year, but Powell has signaled that no decision will be made without sufficient evidence of a shift in economic conditions.