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Powell Reaffirms Cautious Fed Stance Amid Trump's Interest Rate ...
2025-06-25 04:40:11
Economy
Finance

Powell Reaffirms Cautious Fed Stance Amid Trump's Interest Rate Pressure

Image courtesy of : AFP (SAUL LOEB)

Jerome Powell, the Chair of the Federal Reserve, has firmly stated that the central bank will not rush to lower interest rates, despite persistent calls for cuts from President Trump. In his testimony before Congress, Powell highlighted the importance of observing the economy's response to rising tariffs before making any adjustments.

He emphasized the Fed's cautious approach, pointing out that while the economy is performing well, uncertainties regarding inflation remain. This stance contrasts sharply with the more aggressive monetary policies seen in other regions, like the eurozone.

As Powell prepares for further scrutiny in upcoming meetings, the tension between his measured approach and Trump's demands continues to illustrate the complexities of economic governance.

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Will Jerome Powell Yield to Growing Calls for Interest Rate Cuts?

Federal Reserve Chair Jerome Powell faces significant pressure regarding interest rates as the economy shows mixed signals. While Powell maintains a steady rate, citing a robust economy, calls for cuts grow louder, particularly from President Trump and housing experts like Bill Pulte. The Fed's dual mandate, focused on controlling inflation and unemployment, complicates the decision-making process. Some officials, including San Francisco Fed President Mary Daly, suggest potential rate cuts may be necessary by fall, while others, like Christopher Waller, advocate for immediate reductions. This internal division reflects broader concerns over rising inflation and a cooling labor market. Additionally, the housing market remains sensitive to interest rates, as high rates have exacerbated the supply crisis. Economists predict a possible decrease in mortgage rates next year, contingent on inflation trends. Ultimately, the Fed's actions will play a crucial role in shaping economic stability and consumer confidence in the coming months.

Will the Federal Reserve Cut Interest Rates Amid Economic ... Uncertainty?

In recent discussions, Federal Reserve officials, including Chair Jerome Powell and Governor Michelle Bowman, are weighing potential interest rate cuts amid signs of economic uncertainty. Bowman advocates for a reduction if inflation remains close to the target and labor market conditions weaken. Powell, however, emphasizes a cautious approach, citing the economy's solid performance despite external pressures, including tariffs and geopolitical tensions. The Fed seeks a balance between controlling inflation and maintaining low unemployment rates. As analysts anticipate possible rate adjustments, the CME FedWatch tool indicates a notable probability of a cut in July. Observers note that lower interest rates could invigorate the housing market, which has faced challenges from rising mortgage costs. The ongoing debate reflects the complexity of economic indicators and the Fed's dual mandate, with future decisions hinging on forthcoming data. The possibility of rate cuts has also stirred interest in financial markets, including cryptocurrencies, as investors respond to shifting economic signals. Overall, the Federal Reserve's forthcoming actions will be closely monitored as they navigate these intricate economic dynamics.

Read 4 more recent news on this topic

The press radar on this topic:

dailyfreeman
24. Juni 2025 um 13:21

Powell says Fed can wait to reduce interest rates as Trump demands cuts

This article discusses Jerome Powell's stance on interest rates at the Federal Reserve. He emphasizes the need to wait and observe how the economy evolves before making any adjustments. In contrast, President Trump has repeatedly urged the Fed to reduce borrowing costs. Powell is set to testify before Congress for two days, where he may face tough questioning about his policies. Tariffs are likely to push up prices and weigh on economic activity, according to Powell.
Al Jazeera
24. Juni 2025 um 17:08

Powell says US Fed to wait to reduce rates even as Trump demands cuts

US Federal Reserve Chair Jerome Powell told Congress that the central bank will wait to reduce interest rates despite President Donald Trump's demands for immediate cuts. Powell said the Fed needs more time to see how rising tariffs affect inflation, which is expected to increase this year according to economists. The Fed has been holding off on rate cuts as major aspects of Trump's trade policy remain unresolved and its impact on inflation is uncertain.
EL PAÍS
24. Juni 2025 um 20:57

Powell defends his decision not to lower interest rates despite Trump's attacks

Jerome Powell's testimony before the US Congress reaffirmed his stance on maintaining interest rates despite President Donald Trump's pressure. Powell cited the economy's solid performance and maximum employment, while expressing caution due to uncertainty surrounding tariffs' impact on inflation. This contrasted with eurozone central banks' more proactive rate cuts. Investors remained skeptical of rate cuts in July, a view echoed by Christopher Waller. Meanwhile, Neinor's $225 million acquisi..
DER SPIEGEL
25. Juni 2025 um 02:06

Jerome Powell Resists Donald Trump's Demand for Rapid Interest Rate Cut - DER SPIEGEL

The head of the US Federal Reserve, Jerome Powell, has defended his cautious line on monetary policy. Despite pressure from US President Donald Trump for an interest rate cut, experts see no reason for a quick easing. Powell fears that the increase in tariffs could drive up prices and burden the economy. The central bank is currently well positioned to observe the economic developments.
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