If President Trump needed more proof that Federal Reserve Chair Jerome Powell is a roadblock to his economic nationalist agenda, Powell provided that proof this week. On Wednesday, for the fifth straight time since Trump took office, Powell announced that he would keep interest rates unchanged, maintaining the benchmark rate within the existing target range of 4.25 to 4.5 percent.
In light of the political and economic lead-up to the announcement, Powell’s decision to hold rates steady can only be seen as a bold statement of political and policy defiance on behalf of the nation’s economic establishment aimed at Donald J. Trump.
With the latest measures of economic growth surging and inflation plunging, the traditional measures would strongly indicate the need for a Fed rate cut. GDP exceeded expectations in the second quarter of 2025, coming in at a robust 3.0 percent, while inflation plunged to 1.67% in the latest monthly reading. The Fed Chair’s insistence that his refusal to lower rates is justified by ongoing concerns about inflation, and particularly the inflationary ripple effect of Trump’s tariff policies, sounds more like ideological hostility to the president’s economic policies than it does a legitimate concern based on leading indicators. The assessment that Powell’s refusal to cut rates is motivated by purely political opposition to Trump’s America First economic policies was strengthened by the rare dissent expressed by two members of the Fed board in favor of a 25-basis-point cut, marking the first time in over three decades that two members have split from the majority decision.
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