In a dramatic and unusual move, the US Federal Reserve released a public statement claiming its non-partisan position and autonomy. It followed a meeting between Fed Chairman Jerome Powell and President Donald Trump at the White House. The Fed made clear that monetary policy decisions would be based on economic data alone—not on political pressure.
Donald Trump, who hired Jerome Powell in 2018, has repeatedly pressured the central bank to cut interest rates, particularly after markets plunged after his latest round of tariffs. Despite the pressure, the Fed reiterated that it will obey the law, keep prices stable, and aid employment through impartial analysis.
Fed Stands Firm on Independence
The Fed’s three-paragraph release was an atypical public reaction. It underscored that Jerome Powell did not make any prediction or guarantee of future policy actions. He instead confirmed that the Fed’s policy would be driven by data that is coming in rather than political expediency. “The path of policy will depend entirely on incoming economic information and what that means for the outlook,” the release stated.
Jerome Powell informed the President that he and his team will remain committed to their statutory mandate: maximal employment and price stability. He emphasized the need for setting interest rates on the basis of “careful, objective, and non-political analysis.”
Trump Keeps Up the Pressure
During a White House press briefing later in the day, Press Secretary Karoline Leavitt admitted the Fed’s stance. The statement was “correct,” she said. She did, however, confirm that Donald Trump informed Jerome Powell he was “making a mistake” by not reducing interest rates. Trump has intensified his attacks over recent months, particularly after announcing his so-called “Liberation Day” tariffs which shook world markets.
As shares plunged sharply, Trump wrote on TruthSocial, calling for Powell to act. “This would be a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates,” he wrote. Trump accused Powell of always being “late,” and implied that he could now “change his image, and quickly.”
Can Trump Fire Powell?
Even though Jerome Powell was Trump’s own choice in 2018, the friendship has turned sour. Once back in office, Trump has even threatened to dismiss him. But experts in law say that may not be that easy.
A week ago, the US Supreme Court enabled Trump to fire National Labour Relations Board officials. But in doing so, the judge noted that the Federal Reserve is a “uniquely structured, quasi-private entity.” That technicality raises questions about whether Trump can lawfully fire Powell at will.
The Fed’s strong message has a message not only to the markets but also to the White House. It serves to remind the central bank as a guardian of economic stability rather than a partisan political tool. While Trump ratchets up the pressure on Powell, the Fed’s unusual rebuke indicates it won’t crack. Its independence for now remains unbroken.
