UPDATE 🚨 PRESIDENT TRUMP CONFRONTS JEROME POWELL IN PRIVATE MEETING, BLASTS FED’S “OVERTIGHT” MONETARY POLICY
On May 29, 2025, at the White House’s Roosevelt Room, former President Donald J. Trump, now a leading Republican presidential candidate, squared off with Federal Reserve Chair Jerome H. Powell in a rare tête‑à‑tête. Trump accused the Fed of “choking off growth,” warning that current interest‑rate levels were “far too high” and risking a fresh economic slowdown.
Key Details
• Setting: Roosevelt Room, White House; private meeting arranged by GOP lawmakers.
• Trump’s Charge: He labeled the Fed’s benchmark federal‑funds rate of 5.25 – 5.50% “an overreach,” claiming consumers and small businesses already “feel the pinch at every checkout line.”
• Powell’s Defense: Powell reiterated the Fed’s dual mandate to tame inflation, pointing to the 3.4% annual consumer‑price increase as justification for maintaining restrictive rates “until we see sustained progress.”
• Flashpoint Moment: Trump interrupted Powell mid‑sentence, stating, “You’re making a big mistake—you need to cut rates now or watch unemployment tick back up.”
• Broader Context: The Fed has kept rates elevated since March 2022 to combat inflation peaking at 7.9% in mid‑2023. Powell has signaled potential rate cuts later this year, but no timeline has been set.
Why It Matters
1. Market Reaction: Stocks rallied initially on hopes of a Fed pivot, but Treasury yields climbed after Powell’s remarks, reflecting investor uncertainty.
2. Political Stakes: Trump’s public criticism of the Fed underscores his campaign promise to “recharge” economic growth, setting up a clash with the Fed’s independence.
3. Economic Outlook: With GDP growth moderating to an annualized 2.1% in Q1 2025, any abrupt policy U‑turn could stoke inflation risks anew.
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