Trump slams Fed chair as interest rates hold steady amid tariff fears
President Donald Trump criticized Federal Reserve Chair Jerome Powell after the Fed held rates steady, citing risks from Trump’s expanding tariffs.
- The president labeled Fed chair Jerome Powell ‘too late’ and ‘an American disgrace,’ arguing that the Fed’s inaction is costing the U.S. billions in higher interest payments.
- The Federal Reserve held rates steady at 4.25%-4.50% for the fourth consecutive meeting.
Investor caution dominated Wall Street this past week, as escalating tensions between Israel and Iran fueled fears of potential U.S. involvement, while the Federal Reserve’s decision to hold rates unchanged hastened President Donald Trump’s feud with Federal Reserve Chair Jerome Powell.
The Federal Reserve held rates steady at 4.25%-4.50% for the fourth consecutive meeting. While the overall economic uncertainty has “diminished” since March, the Fed warned that risks remain elevated.
Policymakers maintained their median projection of two rate cuts in 2025, while trimming the 2026 outlook from three cuts to two — signaling a slightly more hawkish stance.
Powell defended the pause, arguing that while inflation has moderated, it is still too high to justify rate reductions. He cited new inflationary pressures stemming from tariffs tied to trade policy changes.
The Fed now forecasts 2025 headline inflation at 3%, up from 2.7% in March. Meanwhile, GDP growth was revised downward to 1.4% in 2025, from a prior estimate of 1.7%.
Oil prices, which spiked in the prior week, steadied near $73 per barrel. Powell dismissed parallels with the 1970s oil shocks, stating that while further price spikes are possible, they are unlikely to generate persistent inflationary effects.
Political backlash over the Fed’s stance has intensified. In a social media post, Trump labeled Powell “too late” and “an American disgrace,” arguing that the Fed’s inaction is costing the U.S. billions in higher interest payments.
Echoing the sentiment, Federal Housing Finance Agency Director Bill Pulte called for Powell’s immediate resignation, blaming him for damage to the housing market.
Meanwhile, two major congressional developments shaped market action. The Senate’s draft tax bill proposed phasing out clean energy and solar tax credits earlier than anticipated, sparking a steep sell-off in renewables. First Solar tumbled 13% on the week, Enphase Energy dropped 18%, and Sunrun plunged 35%.
On the crypto front, Coinbase Global surged 27% after the Senate passed a bill establishing a federal framework for dollar-pegged cryptocurrencies, known as stablecoins, offering long-awaited regulatory clarity that could unleash capital from institutional investors.
Benzinga is a financial news and data company headquartered in Detroit.
