Facing Trump, Jerome Powell Stands Firm With Inflation And Jobs In Focus

Jerome Powell, chairman of the Federal Reserve (Fed), is facing increasing political pressure from Donald Trump, who is demanding an immediate interest rate cut. But Powell has no intention of yielding. Loyal to the independence of the institution he leads, he prefers to rely on economic data rather than political demands.

A Showdown Between Donald Trump and Jerome Powell

For several weeks, Donald Trump has publicly criticized Jerome Powell, even going so far as to call him a “loser” and threatening to fire him. The current White House occupant is betting on a rate cut to stimulate growth and strengthen his economic agenda. But the Fed, led by Jerome Powell, believes it is not yet the right time.

Inflation remains above the 2% target, still reaching 2.5% in February according to the PCE indicator. Moreover, the job market remains strong, with low unemployment and sustained consumption. All these factors lead Fed officials to hold back.

A Stable but Uncertain Economy

Regional Fed officials, such as Mary Daly (San Francisco) and Susan Collins (Boston), highlight the current uncertainty related to Donald Trump’s trade policies, particularly his high tariffs. These could fuel persistent inflation and slow growth, favoring a feared stagflation scenario.

“Monetary policy is well positioned“, summarizes Lorie Logan, president of the Dallas Fed, refusing any rush in such a volatile context.

The Fed’s Independence, a Reassuring Pillar

Despite political pressure, the Fed maintains its independence from the White House. For investors, this autonomy is crucial. As Evercore ISI analysts remind us, Jerome Powell’s independence is essential to guarantee economic stability in the face of inflation risks linked to Trump’s political choices.

Jerome Powell stays the course. As long as the data does not justify a cut, the Fed will remain firm despite Donald Trump’s criticism.

Jerome Powell remains steadfast against Donald Trump’s pressures, favoring a cautious approach based on economic data. In a context marked by uncertainty and inflationary tensions, the Fed defends its independence and keeps its course to ensure the long-term stability of the American economy.