The Federal Reserve Decides To Keep Interest Rates The Same
Well, folks, the Federal Reserve just did the financial equivalent of leaving everyone on “read.”
After weeks of speculation — and President Donald Trump all but shouting from the rooftops for a rate cut — Fed Chairman Jerome Powell announced Wednesday that interest rates are staying exactly where they are. Cue the groans from homeowners hoping to refinance and investors dreaming of cheaper money.
This decision landed right after some strong economic news dropped: the economy grew at 3% between April and June — a number that blew past expectations and quieted those whispering about a looming recession.
To most people, that’s a win. To the Fed? It’s a reason to hold the line. Powell, who Trump has taken to calling “Too Late,” has insisted he wants to see inflation closer to 2% before making any moves. But here’s the rub — the Consumer Price Index was at 2.3% in April and ticked up to 2.7% in June. The next report comes in August, and that number might tell us just how much wiggle room Powell thinks he’s got.
Trump, of course, wasn’t exactly subtle about his feelings. “’Too Late’ MUST NOW LOWER THE RATE. No Inflation! Let people buy, and refinance, their homes!” he posted on Truth Social. In classic Trump style, he’s framing Powell as the guy standing between America and an economic boom.
But here’s where it gets interesting: the Fed wasn’t entirely united. Two governors — Christopher Waller and Vice Chair Michelle Bowman — actually voted for a rate cut. Carol Roth, an economic expert and Blaze Media contributor, said that dissent could signal a September shift.
“The odds of a September rate cut are likely to increase in the days ahead,” she noted, pointing out that the Fed rarely acts without telegraphing its intentions in advance.
Meanwhile, Powell is taking heat over something other than rates — namely, a $2.5 billion renovation of the Fed’s headquarters that Trump’s team claims has gone off the rails. Some in Trump’s orbit have even floated investigating Powell or calling for his resignation. The two met at the construction site Thursday, cameras rolling, in what looked like an attempt to cool tensions.
Powell, for his part, isn’t budging. “We’re never going to be influenced by any political pressure,” he said back in April. Translation: Trump can huff, puff, and nickname all he wants — but Powell’s not moving until he thinks the numbers say so.