Political pressure is mounting around the US Federal Reserve as expectations for rate cuts intensify. Fed Chair Jerome Powell will testify before Congress this week to provide an update on the central bank’s views on inflation and the economy. On Tuesday, June 24, 2025, at 10:00 a.m. EST, he will appear before the House Financial Services Committee in Room 2128 of the Rayburn House Office Building. On Wednesday, he will testify before the Senate Banking Committee. Several other Fed officials are also scheduled to speak throughout the week.

Powell faces growing criticism, especially from President Trump, who has repeatedly demanded aggressive rate cuts. Trump has called for a three percentage point reduction, accusing Powell of being behind the curve while other central banks, particularly in Europe, have already moved to ease policy. On Truth Social, Trump lashed out again on Tuesday morning, calling Powell “too late” and urging Congress to hold him accountable for refusing to lower rates, claiming lower rates could save the US $800 billion per year.

Meanwhile, political influence appears to be creeping into the Fed itself. Two key Fed officials, Governor Michelle Bowman and Governor Christopher Waller, recently suggested that rate cuts could begin as early as July if inflation data remains consistent. The next FOMC meeting is scheduled for July 29 and 30.

Speaking in Prague, Bowman stated that she could see a case for loosening policy next month, while Waller echoed similar views. Despite that, markets remain skeptical that July will be the starting point, with most pricing favoring September for the first rate cut.

Last week, the Fed kept rates unchanged, but policymakers forecast 50 basis points of total easing by December, likely through two quarter-point cuts. The Fed’s latest projections reflect lower growth expectations combined with stubbornly high inflation, raising concerns about stagflation. Trade tensions, tariffs, and unpredictable price pressures tied to Trump administration policies add further uncertainty.

The next key data point is Friday’s release of the May PCE inflation report, the Fed's preferred inflation measure, which will signal whether price pressures are easing toward the 2 percent target.

Powell’s testimony today at 10:00 a.m. EST and again on Wednesday could trigger market reactions, especially if Trump’s political allies aggressively challenge him. With the Fed divided over timing and the economy flashing mixed signals, the stakes for Powell and for monetary policy are higher than ever.

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