Federal reserve system set to announce interest rate decision amid Trump’s pressure
Following a meeting with Federal Reserve Chairman Jerome Powell, the Fed Chairman said the US economy is “really doing well,” which could lead to lower interest rates.
The Federal Reserve is set to announce the latest decision this week on interest rates within the president Donald TrumpEfforts to lobby central banks resulted in lowering interest rates.
The Federal Open Market Committee (FOMC), the central bank’s monetary policy setting panel, will begin its two-day meeting on Tuesday and announce its interest rate decisions on Wednesday. Jerome Powell A press conference will also be held.
Trump has repeatedly criticized Powell for not cutting interest rates. He says it will cost billions of dollars in interest costs incurred by serving the federal government in its national debt. Powell points to concerns about tariffs that further alienate inflation from the Fed’s 2% target rate as a reason to curb interest rate cuts.
Last week, Trump became the fourth president to visit the Fed as he and his allies toured the central bank’s headquarters amid continuing renovations that drew criticism for exceeding the budget. During the visit, the president took advantage of face-to-face opportunities to repeatedly call for interest rate cuts.
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President Donald Trump spoke on July 24, 2025, during a tour of the Federal Reserve Committee building currently under renovation in Washington, DC. (Reuters/Kent Nishimura/Reuters)
“I think Jerome Powell, we had a very good meeting. We forgot about buildings that were out of control and so on, but I think there was a very good meeting on interest rates,” Trump said after him. Conversation with Powell. “He said congratulations, this country is doing very well and I meant that he would start to recommend lower interest rates.”
Powell emphasized that. Federal Reserve System We are not in a hurry to cut interest rates due to the uncertainty surrounding the effects of inflation and tariffs on consumer prices.
He says in his current stance the Fed is suited to address risks to both sides of the central bank’s dual mission. Inflation goalalong with promoting maximum employment. Despite advances in slowing the pace from the 40-year high that reached 2022 during the Biden administration, inflation has consistently surpassed the Fed’s 2% target.
Federal Reserve Chairman Jerome Powell said the Fed is in a good position to monitor inflation and labour market data before deciding to cut interest rates. (Alex Wong / Getty Images / Getty Images)
Powell is the Fed’s chairman, but he and the other Fed governors who make up the 12 FOMCs are collectively responsible for making decisions about the movement of central bank benchmark federal fund rates. This range has been between 4.25% and 4.5% since the last reduction in FOMC in December 2024.
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One of the voting members on the panel, Fed Governor Christopher Wallerbelieves the Fed should cut interest rates ahead of the meeting, dismisses concerns about tariffs that promote inflation, and argues that it will cause a one-off price hike that should be seen in the past.
Gov. Michelle Bowman also said the meeting believes interest rate cuts are needed to prevent further weakening. Lab.
Federal Reserve Gov. Christopher Waller said the Fed should see price increases and low interest rates due to past tariffs. (Brendan McDermid/Reuters/Reuters)
The market expects the Fed to be stable again in its fifth consecutive meeting, with the CME FedWatch tool showing a 96.9% chance of remaining at its current level, rising from 81.4% a month ago.
If this FOMC meeting is done as the market expects, Waller, Bowman, and other like-minded policymakers who voted against the views of the majority could author the opposition outlining how the Fed should go. Bowman is Public opposition When she said, the Fed should have cut 25 basis points last September, not 50.
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Gov. Michelle Bowman said fee cuts may be needed soon to support the labor market. (Graeme Sloan/Bloomberg via Getty Images)
The Fed Governor’s perspective is different, but the market believes that the majority of FOMC will reach a reduction rate by the end of 2025.
The CME FedWatch tool currently shows a 63.7% chance of 25 basis points at the next FOMC meeting in mid-September. After the Fed’s late October meeting, the tool has shown that interest rates will be 25 basis points 50.5%, and 29.7%, with a 50 basis points lower.
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Additionally, it shows that the target rate could be 75 basis points lower than the current level after the Fed’s meeting with a 42.8% chance of a 50 basis point reduction, a 30.7% chance of a 25 basis point reduction, and a 7% chance of staying at current levels until the end of the year.