ABC video screenshot

 

In an assertive move on Wednesday, the Federal Reserve kept interest rates steady, deflecting President Donald Trump’s demands for lowering the rates. Fed Chair Jerome Powell brought attention to the Fed’s political independence, highlighting its role in making data-driven decisions insulated from political influence. "Without independence, there’s the temptation to use rates for election advantages," he stated.

 

Following the president's visit to the Federal Reserve last week, Powell described the meeting as amicable, but he remained steadfast in the Federal Reserve’s cautious approach in light of ongoing trade tariff impacts. Powell noted some price hikes due to tariffs but mentioned that their enduring impact on inflation remains uncertain. "We'll act as needed to control inflation," he assured.

 

Despite the pressure, the decision marks the continuation of a seven-month pause in rate adjustments, keeping the federal funds rate between 4.25% and 4.5%. Dissent within the Fed emerged with two governors, Michelle Bowman and Christopher Waller, expressing a preference for a cut, marking the first such dissent since 1993, reported ABC News.

 

Recent government data showed unexpectedly strong economic growth, which could reduce the urgency for rate cuts, reinforcing the Fed's patient stance. Trump, known for his outspoken criticism, continues to press for lower rates, arguing it would boost the economy and reduce government debt interest payments. However, Powell remains at the helm, with his term set to expire in May 2026.

 

The Fed’s dual mandate of controlling inflation and maximising employment remains central to its strategy. While inflation saw a slight rise, it stayed below its June 2022 peak. Powell hinted at the possibility of future rate cuts, contingent on economic data, and left room for adjustments in upcoming meetings.

 

In the ongoing dispute over spending on the Fed’s headquarters renovation, Trump criticised the project’s cost overruns. Despite this, the Fed affirms the renovation will eventually cut costs by consolidating operations.

 

Powell’s recent comments at the European Central Bank forum in Portugal hinted at potential shifts based on evolving economic indicators, keeping all options on the table for upcoming policy meetings.

 

The Fed’s current conservative course suggests vigilance amidst global economic uncertainties, ready to pivot should inflation threats or economic circumstances demand. As the year progresses, all eyes remain on the data to dictate the Fed's next steps.

 

  Adapted by ASEAN Now from ABC News 2025-07-31

 

 

Powell puts what is best for economy in the long term first

Trump puts whatever he thinks will boost him, the heck with long term, first

True here, true with just about everything Trump touches

Oh, Donnie will have some sleepless nights now in full rage?

Trump is pissing in the wind with his tantrums, because it isn't Powell who decide on the rate decisions.

 

A team of 7 FED governors do that

Trump calling Powell on the phone.........

 

"Do you ever get a stabbing feeling in the back of your head like someone is sticking pins in a voodoo doll?"

 

Powell.......

 

"No"

 

Trump.......

 

"How about now?"