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Powell told Trump that the central bank would make decisions
about the short-term interest rate it controls “based solely on
careful, objective, and non-political analysis.” The Fed's rate
typically influences borrowing costs across the economy,
including for mortgages, car loans, and business borrowing.
The meeting comes as Trump has assailed Powell for not reducing
the Fed’s key interest rate, calling him “Too Late Powell.” The
president initiated the meeting, the Fed said.
Trump argues that there is “no inflation” and so Powell should
cut rates, though such a move might not necessarily reduce the
borrowing costs consumers face. Inflation is down substantially
from a year ago, yet it remains above the Fed’s 2% target. Trump
has also called Powell a “fool” and earlier this year suggested
he would fire the Fed chair.
After financial markets reacted negatively, Trump said he had
“no intention” of removing Powell, whose term as chair ends in
May 2026.
The meeting is the first during Trump’s second term, though the
two met and had lunch together in his first term. Fed chairs
regularly meet with Treasury secretaries but less often with
presidents, given that the Fed’s interest rate decisions are
intended to be separate from political concerns.
Earlier this month, Powell said he had never requested a meeting
with a president and added, “I never will,” suggesting it was
inappropriate given the Fed's political independence.
“I can’t imagine myself doing that," Powell said at a press
conference May 7. “It’s always—comes the other way: A President
wants to meet with you.”
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