Fed Holds Rates Steady as Trump’s Tariffs Challenge Powell’s Grip on Inflation

The Federal Reserve voted Wednesday to hold interest rates steady, but Chairman Jerome Powell raised eyebrows with his lack of confidence and warnings about inflation warnings that sounded more like political talking points than sound monetary leadership.

Powell, speaking at a news conference, claimed that President Trump’s aggressive trade policies could spark inflation and unemployment, even as the U.S. economy continues to outperform expectations.

“If the large increases in tariffs that have been announced are sustained, they’re likely to generate a rise in inflation, a slowdown in economic growth, and an increase in unemployment,” Powell warned.

Yet in the same breath, Powell admitted that he has no idea what the Fed should actually do next.

“It’s really not at all clear what it is we should do,” he said. “I don’t know which way this will shake out.”

That’s not leadership. That’s guessing.

The Fed’s decision keeps rates at 4.25% to 4.5%, where they’ve been parked since last December after minor rate cuts the year before. But with inflation cooling, consumer spending steady, and Trump’s deregulatory, pro-growth policies gaining steam, Powell’s concerns ring hollow.

While markets have seen volatility around tariff announcements, it’s important to look at the big picture:

• Trump’s tariffs are targeted, not reckless aimed at countries like China, Mexico, and Canada that have taken advantage of America for decades.

• Talks with Canada and Mexico are progressing, and new trade arrangements are already in the works.

• U.S.-China trade talks are now scheduled for this weekend in Switzerland, signaling progress even amid strategic pressure.

Treasury Secretary Scott Bessent confirmed that talks with Beijing are about to begin.

“We will meet on Saturday and Sunday,” Bessent said. “They’ll be in Switzerland, and we’ll be there too.”

Meanwhile, Trump’s economic vision continues to resonate with the American people, particularly working-class and middle-income families who were left behind by Obama-era stagnation and Fed manipulation.

“We are going to do NO TAX ON TIPS, NO TAX ON SENIORS’ SOCIAL SECURITY, NO TAX ON OVERTIME,” Trump posted Wednesday. “It will be the biggest Tax Cut for Middle and Working Class Americans by far, and it is time for Main Street to WIN.”

While Powell flounders with abstract fears and indecision, Trump is building a Main Street economic machine that rewards hard work, domestic industry, and self-reliance not endless globalization and central bank games.

The Fed may still be stuck in the past, but America isn’t. Inflation is being fought with smart tariffs, not useless interest rate tinkering, and real families are seeing hope again.

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