➡️ Powell Says "No Cut" This Week
The Federal Reserve is holding a key meeting this Tuesday and Wednesday—but Fed Chair Jerome Powell has already made things clear: no interest rate cut is coming.
Despite strong political pressure from Donald Trump and his team, Powell is sticking to the Fed’s current path—keep rates steady and watch how the economy performs.
➡️ Trump vs Powell: The Political Heat Builds
Trump isn’t happy. He’s been loudly criticizing Powell, calling him slow and even hinting that he should be removed.
On social media, Trump recently wrote:
“There can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW.”
But by the end of the week, after markets dipped, Trump walked it back a little, saying he wasn’t trying to fire Powell.
Still, behind the scenes, the White House is pushing to gain more control over agencies like the Fed, which are designed to be independent from politics.
➡️ Why Powell Isn’t Cutting Rates Yet
The Fed’s main goal is price stability, not political satisfaction. Powell and his team want to see clear, long-term signs that inflation is under control before making borrowing cheaper.
Even though inflation is cooling based on the Fed’s preferred gauge, new tariffs could drive prices back up, making it risky to cut rates now.
Recent job data—177,000 jobs added in April—also supports the idea that the economy is holding steady. That gives the Fed more reason to pause.
➡️ What Analysts and Other Fed Members Are Saying
Bloomberg Economics expects Powell to stand firm. Their analysts believe Powell will remind markets that fighting inflation is still the top priority.
Fed officials like Thomas Barkin and Adriana Kugler are also worried that if the Fed cuts too early, people might expect inflation to come back, which could make things worse.
➡️ While the Fed Pauses, Other Countries Act
Unlike the Fed, other central banks are already making moves:
Europe has started cutting rates to fight weak growth—but inflation hasn’t dropped much there.
Canada is confused by the economic outlook, releasing two different forecasts tied to US-Canada tariff battles.
It shows just how uncertain and volatile the global economy is right now.
➡️ What’s Coming Next?
This week has a light schedule for economic data in the US.
Monday: We’ll get the April services index from the Institute for Supply Management.
Later: Jobless claims data could give new signals, though recent spikes were likely caused by New York’s school break.
Meanwhile, the White House is continuing its legal fight to reduce protections for independent agencies like the Fed—pushing for more presidential power.
