Federal Reserve Decides on Interest Rates
The U.S. Federal Reserve has made a decision regarding interest rates, and it seems President Donald Trump might not be pleased with it.
The governors opted to maintain overnight bank rates at their current levels, which sit between 3.5% to 3.75%. This decision came despite calls to lower rates.
Fed Chairman Jerome Powell explained at a press conference that keeping rates steady supports the Fed’s dual goals of maximizing employment while managing inflation.
He added that the consequences of tariffs, recent Supreme Court rulings affecting some tariffs, geopolitical tensions involving Iran, and climbing oil prices are not fully understood yet.
“We’re trying to balance two goals here,” Powell noted, mentioning the potential risks to the job market on one side and inflation pressures on the other.
The stock market has been facing challenges recently, with prices dropping following military actions against Iran by the U.S. and Israel, especially after the Fed’s announcement.
Despite these obstacles, Powell remarked on the overall robust performance of the U.S. economy in the past few years, which, he emphasized, has been quite impressive.
Furthermore, he dismissed any suggestions that the U.S. is facing what is termed “stagflation,” where slow growth coincides with high inflation. “I prefer to reserve the term for more dire situations,” he mentioned, asserting that this is not our current reality.
In related news, the Supreme Court has turned down President Trump’s emergency request to remove a Federal Reserve governor, Lisa Cook, at least for now.
Separately, Powell has find himself under scrutiny for the management of a significant renovation project within the Federal Reserve Building. While concerns seemed to ease somewhat after he showed Trump the project’s progress, the Justice Department still issued subpoenas about the situation, which were later rejected by a federal judge accused of bias against Trump.
Back in April 2025, Trump expressed his thoughts on Powell, arguing that inflation should remain low, but a slowdown could occur unless action was taken sooner regarding interest rates. “Europe has already lowered rates multiple times,” he had said, criticizing Powell for acting too late in crucial moments.
