Powell Pushes Back on Trump, Signals Fed Rate Cuts Unlikely Before Fall

Federal Reserve Chair Jerome Powell signaled on Tuesday that the central bank will delay interest rate cuts until at least the fall, brushing aside pressure from President Donald Trump and warning that rising tariffs could fuel inflation over the summer.

Speaking before the House Financial Services Committee, Powell made it clear the Fed won’t be rushed into easing policy just because the White House says it’s time.

“I do not want to point to a particular meeting,” Powell said, dismissing the idea of a rate cut in July. “We don’t need to be in any rush.”

That’s despite the fact that inflation remains modest and the labor market stable conditions that would normally justify rate relief. Instead, Powell and his team are focused on the unknown inflationary effects of new trade tariffs, saying the Fed expects to start seeing those impacts in June and July economic data.

“If inflation pressures remain contained, we will get to a place where we cut rates sooner than later,” Powell conceded but made clear it won’t be this summer.

Trump has been vocal in his frustration, arguing the Fed’s stubbornness is hurting American competitiveness.

“We should be at least two to three points lower,” Trump said in a post ahead of Powell’s testimony. He went on to slam Powell as a “dumb, hardheaded person” and called on Congress to “work him over.”

Here’s what the market took from Powell’s remarks:

• July rate cut now unlikely.

• September cut is still possible, depending on inflation data.

• Fed will stay sidelined until it can “learn more” about economic impacts of tariffs.

The central bank’s last meeting showed most officials expect two cuts before the end of the year but they’re not ready to act yet. In fact, Powell’s remarks pushed traders to lower expectations for a near-term cut, while keeping hopes alive for later in 2025.

Meanwhile, two Fed governors both Trump appointees have broken ranks, saying the Fed should move sooner if inflation doesn’t materialize. Yet Powell is sticking with his cautious approach, warning that all “professional forecasters” still anticipate price pressures to grow.

Translation: The Fed isn’t ignoring the Trump economy it’s just not ready to give it a boost without more clarity.

For conservatives and market watchers, the tension is obvious. Trump delivered economic strength and stability during his first term. But a resistant Fed, still tangled in outdated frameworks and academic orthodoxy, may be standing in the way of unleashing the next phase of American growth.

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