Powell and Trump Hold Rare Meeting: Not Lowering Interest Rates Is a Mistake, Says Trump

TradingKey - On Thursday, May 29, Federal Reserve Chair Jerome Powell met with U.S. President Donald Trump at the White House to discuss economic growth, employment, and inflation — marking their first face-to-face meeting since November 2019. Earlier this year, Trump had threatened to fire Powell, raising concerns about the independence of the central bank.

According to a statement from the Federal Reserve, Powell did not comment on future monetary policy moves during the meeting. Instead, he reiterated that the Fed’s decisions will be based entirely on incoming data and its implications for the outlook.

Powell emphasized that policymakers will continue to make decisions based on careful, objective, and non-political analysis.

Trump, however, maintained his criticism, calling Powell’s reluctance to cut interest rates a “mistake” that puts the U.S. at an economic disadvantage compared to China and other nations.

He has repeatedly criticized Powell in public, dubbing him “Mr. Late” for his cautious approach to rate cuts. Trump previously threatened to remove Powell from his post—whose term was originally set to end in May 2026.

Fed Independence Under Fire

The ongoing tension between Trump and Powell has raised widespread concern over the independence of the Federal Reserve, fueling the “Sell America” trade seen on Wall Street in recent weeks.

In the minutes from the Federal Reserve’s May meeting, officials noted growing market volatility in U.S. Treasuries, equities, and the dollar — signs they believe reflect weakening confidence in the U.S. as a safe-haven asset.

Some Fed members expressed concern that if investor confidence continues to erode, it could have long-term consequences for financial stability and economic performance.