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Federal Reserve Defies Trump Again, Keeps Interest Rates Unchanged

The Federal Reserve announced Wednesday it will keep interest rates unchanged, defying President Donald Trump’s calls to cut them after continued positive economic indicators.

After two days of meetings, the central bank policymakers voted to keep the rate in the 4.25% to 4.50% range, where it has remained since December. Federal Reserve Chair Jerome Powell continues to point to unease around Trump’s tariffs, with more set to take effect on Friday. Last month, year-over-year inflation also rose to 2.7%, which remains above the Fed’s target of 2%.

“Although swings in net exports continue to affect the data, recent indicators suggest that growth of economic activity moderated in the first half of the year,” the Fed said in a post-meeting statement. “The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated.”

At a press conference Wednesday afternoon following the announcement, Powell acknowledged that inflation “has eased significantly from its highs in mid-2022,” but he added that it “remains somewhat elevated relative to our 2% longer-run goal.”

Powell said that Trump’s increased tariffs “are pushing up prices in some categories of goods.” He added that policymakers “have made no decision” about where they will land at the next Fed meeting in September.

“We don’t do that in advance,” he said. “We’ll be taking that information into consideration and all the other information we get as we make our decision.”

The announcement is likely to set off another round of angry comments from President Trump, who has ramped up his criticism of Powell in recent weeks, regularly pushing the Fed to bring down interest rates. In a Truth Social post on Wednesday morning, Trump highlighted the “better-than-expected” second-quarter GDP report, which showed that the U.S. economy grew at a 3% rate, once again surprising economists. He referred to Powell as “Too Late.”

“2Q GDP JUST OUT: 3%, WAY BETTER THAN EXPECTED! ‘Too Late’ MUST NOW LOWER THE RATE. No Inflation! Let people buy, and refinance, their homes!” Trump wrote, using the nickname, “Too Late,” that he coined for Powell.

Trump also discussed interest rates during a press conference at the White House just moments before the Fed released its decision. The president said that the Fed “probably” wouldn’t lower the interest rates on Wednesday, adding, “I hear they’re going to do it in September, not today. For what reason, nobody knows.”

Two Fed Governors, Christopher Waller and Vice Chair for Supervision Michelle Bowman, voted against the Fed’s decision to keep interest rates the same, marking the first time since 1993 that multiple governors voted no on a rate decision, according to CNBC.

The president met with Powell last week to discuss interest rates and tour the renovations at the Federal Reserve headquarters. During their comments in front of the cameras, Trump told reporters that he would “love” for Powell “to lower interest rates” before giving the Fed Chair a slap on the back.


Trump, who has referred to Powell as one of the “most destructive” people in government, said last Friday that his discussion with Powell led him to believe that the Fed was ready to lower interest rates.

“[Powell] said to me — now I don’t know if he’s going to say this … on what day he speaks — he said to me very strongly, ‘The country is doing well.’ Trump said, ‘Congratulations, the country is doing really well.’”

The president has considered firing Powell, reportedly drafting a letter and asking House Republicans if he should move forward with terminating the Fed Chair, which would be an unprecedented move. Trump later said that he would wait for Powell’s term as the Chair to expire in early 2026 before choosing his replacement.

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