Jerome Powell had a surprise visit from Trump. He’s poised to leave interest rates unchanged anyway

What caught my attention is Economy·Federal ReserveJerome Powell had a surprise visit from Trump

Additionally, AP Photo/Julia Demaree NikhinsonThe Federal Reserve is expected to leave its short-term interest rate unchanged on Wednesday for the fifth straight meeting, a move that will ly underscore the deep divide between how Chair Jerome Powell and his chief critic, President Donald Trump, see the economy

Moreover, This tells us that Fed itself, to be sure, is increasingly divided over its next steps, and many economists expect that two members of the Fed’s governing board — both appointed by Trump — could dissent on Wednesday in favor of cutting rates (fascinating analysis)

Even so, the gap between the views of the Fed’s interest-rate setting committee, chaired by Powell, and the White House is unusually large

For example, Trump says that because the U

On the other hand, Economy is doing well, the Fed should cut rates, as if the U

Is a blue-chip company that should pay less to borrow than a risky start-up

But Fed officials — and nearly all economists — see it the other way: A solid economy means rates should be relatively high, to prevent overheating and a burst of inflation

Additionally, “I’d argue that our interest rates are higher because our economy’s doing fairly well, not in spite of it,” said Gennadiy Goldberg, head of U (this bears monitoring)

Moreover, Nevertheless, Rates strategy at TD Securities

Trump argues that the Fed in general and Powell in particular are costing U

However, In contrast, Yet Fed officials don’t think it’s their job to reduce rates the government pays on Treasury notes and bonds (this bears monitoring)

Most economists worry that if they did, they would risk failing at one of the key jobs Congress gave them: fighting inflation

Moreover, “It’s using monetary policy to ease pressure on fiscal policymakers, and that way points to higher inflation and bigger blems down the road,” said William English, an economist at the Yale School of Management and former senior Fed staffer

If financial see that the Fed is focused on keeping borrowing costs low to help the government — rather than focusing on its congressionally-mandated goals of stable prices and maximum employment — Wall Street investors, worried future inflation, will ly demand higher interest rates to hold Treasury bonds, economists say, pushing up borrowing costs across the economy

The Fed’s rate often — but not always — influences longer-term borrowing costs for mortgages, car loans, and credit cards

Inflation has fallen sharply and as a result Fed officials have signaled they will cut rates by as much as a half-percentage point this year

Nevertheless, At the same time, Yet it has picked up a bit in the last two months and many of those policymakers, including Powell, still want to make sure that tariffs aren’t going to lift inflation much higher before they make a move

On the other hand, Inflation accelerated to 2

Additionally, 7% in June from 2. 4% in May, the government said earlier this month, above the Fed’s 2% target

Core prices, which exclude the volatile food and energy, rose to 2

Additionally, Last week, Trump and several White House officials ramped up their attacks on Powell over rates

They also criticized the ballooning costs of the Fed’s renovation of two of its buildings, raising questions over whether the president was looking to fire Powell for cause rather than policy differences, given current economic conditions

Trump and Powell engaged in an extraordinary on-camera confrontation over the cost of the ject during Trump’s visit to the building site last Thursday, given current economic conditions

Nevertheless, On Monday, Trump was more restrained in his s on the Fed during a joint appearance in London with British Prime Minister Keir Starmer. “I’m not going to say anything bad,” Trump said (quite telling). “We’re doing so well, even without the rate cut, in today's financial world

Moreover, ” But he added, “a smart person would cut. ” Some economists expect that the Fed will reduce its key rate by a quarter-point in September, rather than July, and say that the two-month delay will make little difference to the economy, in light of current trends

Trump is pushing them to cut it to just 1%, in today's financial world. “That’s not going to happen with anything the current people on the committee,” English said, amid market uncertainty

Additionally, Wall Street investors also expect relatively few cuts: Two this year and two in 2026, according to futures pricing tracked by CME’s Fedwatch, in this volatile climate

Moreover, According to the Fed’s jections, just two officials in June supported three cuts this year, ly Trump’s appointments from his first term: governors Christopher Waller and Michelle Bowman

Waller gave a speech earlier this month supporting a rate reduction in July, but for a very different reason than Trump: He is worried the economy is faltering (fascinating analysis), considering recent developments. “The economy is still growing, but its momentum has slowed significantly, and the risks” of rising unemployment “have increased,” Waller said

However, Waller has also emphasized that tariffs will create just a one-time bump in prices but won’t lead to inflation

Yet most Fed officials see the job market as relatively healthy — with unemployment at a low 4. 1% — and that as a result, they can take time to make sure that’s how everything plays out. “Continued overall solid economic conditions enable the Fed to take the time to carefully assess the wide range of incoming data,” said Susan Collins, president of the Boston Federal Reserve

In contrast, Explore this year's list, in light of current trends.