Fed Chair Powell labelled as 'miserable failure' by Trump following rate holding decision by the Federal Reserve

Fed Chair Powell labelled as 'miserable failure' by Trump following rate holding decision by the Federal Reserve

In a move that defied President Donald Trump's repeated calls for a rate cut, the Federal Reserve left interest rates unchanged at its July 30, 2025 meeting, marking the fifth consecutive meeting without a change[2][4]. Despite the pressure, the Fed is carefully balancing the need to support the economy with the need to control inflation.

The latest inflation data shows consumer prices rose 2.6% compared with a year ago, up from 2.3% last month[1]. This increase, coupled with the impact of tariffs on consumer prices, has made a September interest rate cut less likely[5]. The Federal Reserve's Headquarters is currently under renovation, a project that has been criticized for cost overruns by Trump and his allies[8].

The Fed's decision to hold rates steady follows the release of the personal consumption expenditures (PCE) index for June, which showed a slight increase in inflation[6]. Core PCE, which excludes volatile food and energy prices, rose from 2.7% to 2.8% on an annual basis[3]. The CME FedWatch's tool shows the probability of a 25-basis-point rate cut in September has declined to 39.2%[5].

The Fed's reluctance to provide a clear signal on the timing of rate cuts is due to the uncertainty over the impact of tariffs on inflation and consumer prices, as well as conditions in the labor market[7]. Federal Reserve Chair Jerome Powell noted that higher tariffs could lead to a one-time price hike or more persistent inflation that the Fed has to assess and manage[6].

President Trump, however, was not pleased with the Fed's decision. He took to his Truth Social platform to blast Powell, accusing him of being "TOO LATE, and actually, TOO ANGRY, TOO STUPID, & TOO POLITICAL" and costing the country "TRILLIONS OF DOLLARS."[9]

Kevin Hassett, White House National Economic Council director, discussed the U.S. economy's 3% growth in the second quarter and the Federal Reserve leaving interest rates unchanged on The Evening Edit[4]. Despite the ongoing debate, the Fed's current stance is to hold interest rates steady for now, as it carefully monitors economic and labor market conditions before easing monetary policy[1][2][3].

References:

1. Wall Street Journal
2. CNN Business
3. Bloomberg
4. Fox Business
5. CNBC
6. Reuters
7. The Hill
8. Politico
9. Truth Social
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