Tensions rise between the White House and the United States Federal Reserve (Fed)

Pressure escalates as Vice President JD Vance publicly criticizes Fed Chairman Jerome Powell for refusing to cut interest rates despite inflation rates starting to decrease. Vance questions the political consistency in the decision to cut interest rates before elections, implying instability in macroeconomic policies. Is the Fed choosing a safe route or is it being influenced by political factors?

Vice President JD Vance calls for interest rate cuts

On social media, JD Vance questioned why Powell had previously cut 50 basis points right before the 2024 election, but now with lower inflation, he is not acting. He wrote: "I would really like to hear the reason why Powell cut interest rates just before the election but is not doing so now that inflation has decreased."

This opinion comes after a government report showed inflation in the U.S. in May only increased by 0.2%, lower than many experts' predictions. Nevertheless, the Fed still maintains the current interest rate level.

JD Vance argues that keeping interest rates high is driving up borrowing costs for housing, cars, and startups, harming citizens and businesses. He calls for the realization of interest rate cuts to alleviate financial burdens.

Intense conflict: Former President Trump publicly opposes Powell

Donald Trump is also not outside the fray, although he appointed Powell as the Fed chairman, he continuously criticizes the Fed for not lowering interest rates quickly enough.

Over the past year, Trump has repeatedly called Powell "stubborn" and "a big failure," even suggesting firing him. Trump’s dissatisfaction indicates a deep conflict regarding how monetary policy is managed.

Jerome Powell asserts that he is not in a hurry to cut interest rates

During the congressional hearing on June 24, Powell defended the Fed's cautious stance. The central bank needs to wait for more economic data, especially the impact of the new taxes imposed by Trump, before deciding to cut interest rates.

Although inflation has cooled down, Powell emphasizes that there are still too many uncertainties preventing the Fed from taking proactive action.

Predicted interest rate cut move in September 2025

While the Fed has just kept interest rates at 4.25%–4.5%, experts predict a potential cut could happen from September onwards. The Polymarket prediction platform shows a 51% probability of the Fed reducing by 25 basis points in September, with only a 5% chance for a stronger cut.

However, there is also a 47% chance that the Fed will maintain interest rates at the current level. Whichever scenario occurs, it is clear that the clash between politics and monetary policy will continue to heat up in the coming months.

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The picture of U.S. monetary policy is under tremendous pressure between real economic factors and the political machinery. Whether the Fed reduces interest rates will have widespread impacts on capital flows, financial markets, especially in the context of cryptocurrencies increasingly becoming an essential part of global investment portfolios. Closely monitoring this development helps investors make transparent and effective strategic decisions while optimizing profits in a volatile environment.

Source: https://tintucbitcoin.com/jd-vance-che-chu-tich-fed-powell/

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