Federal Reserve Chair Jerome Powell said Tuesday that the central bank likely would have already cut interest rates this year if not for major policy shifts from President Donald Trump.
“I do think that’s right,” Powell acknowledged during a central banking panel in Sintra, Portugal, when asked whether the Fed would have begun easing by now absent Trump’s policy interventions.
The Fed has yet to lower rates in 2025. Officials have pointed to Trump’s sweeping tariff actions as a key source of uncertainty, prompting a cautious, data-dependent approach as they wait to assess the economic impact before taking further action.
That patient stance has drawn sharp criticism from Trump, who has repeatedly lambasted Powell, calling him a “moron” and a “numbskull” for not cutting rates sooner.
On Monday, Trump posted a handwritten note on his social media platform, slamming Powell for keeping interest rates higher than those of many other countries, accusing him of costing the U.S. “a fortune” and continuing to do so. According to White House press secretary Karoline Leavitt, the note was formally delivered to the Federal Reserve the same day.
Trump isn’t alone in calling for a rate cut. Fed Vice Chair for Supervision Michelle Bowman and Governor Christopher Waller have both recently signaled openness to easing policy as soon as July—but neither has gone as far as endorsing the large, aggressive cuts Trump has demanded. Both emphasized that any move would depend on the extent of inflation stemming from the president’s tariffs.
Despite these calls, a July rate cut remains unlikely. Futures markets currently reflect an 81% chance the Fed will hold rates steady at its July 29–30 meeting, and only a 19% chance of a quarter-point cut.
Still, Powell confirmed that most Fed officials anticipate lowering rates later in the year—contingent on the path of inflation and labor market data.
“A solid majority of (Fed officials) do expect that it will become appropriate later this year to begin to reduce rates again,” he said.
Asked specifically whether a July cut is under consideration, Powell responded: “I can’t say,” adding that he wouldn’t rule out—or commit to—any particular meeting.
Joining Powell on the Sintra panel was European Central Bank President Christine Lagarde, who praised his conduct in the face of political pressure, calling him “the epitome of a courageous central banker.”
When asked how she would handle Trump’s public criticism if she were in Powell’s shoes, Lagarde replied, “I think we would all do exactly the same thing as our colleague, Jay Powell, does. The same thing.”
Powell, for his part, declined to respond directly to Trump’s barbs, stating simply: “I’m very focused on just doing my job.”
