The governors of the U.S. Federal Reserve have voted on interest rates — and President Donald Trump won’t be happy with the result.
The governors voted to keep overnight banking interest rates at their current levels despite pressure from Trump to lower them. The rates are currently in the 3.5%-3.75% range.
‘The US economy has really been just doing pretty well through a lot of significant challenges.’
Fed Chair Jerome Powell said in a media briefing Wednesday that holding the rates would contribute to fulfilling the dual mandate of maximum employment while keeping inflation down.
He emphasized that the economic effects of the tariffs, a Supreme Court ruling knocking down some tariffs, the attacks on Iran, and the spike in oil prices were all mostly unknown at this point.
“We are balancing these two goals in a situation where the risks to the labor market are to the downside, which would call for lower rates, and the risks to inflation are to the upside, which would call for higher rates, or not cutting anyway,” Powell said.
The stock market has tumbled downward since oil prices spiked following the U.S.-Israeli military strikes on the Iranian regime. Losses extended after the announcement from the Fed.
“The U.S. economy has really been just doing pretty well through a lot of significant challenges over the past few years. It’s been amazing to see,” Powell said.
He also rejected the assessment by some that the economy had entered a period of “stagflation,” which is low economic growth accompanied by higher inflation.
“I would reserve the term stagflation for a much more serious set of circumstances,” Powell added. “That is not the situation we’re in.”
RELATED: Supreme Court denies Trump emergency motion to fire Lisa Cook from the Fed — for now
Powell is also under investigation over claims that a billion-dollar renovation of the Federal Reserve building was being mismanaged. While those accusations appeared to have been defused when Powell hosted the president at the building to show him the renovation progress, the Dept. of Justice later issued subpoenas related to the claims.
Those subpoenas were rejected by a federal judge accused by the administration of being biased against Trump.
“There can almost be no inflation, but there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW,” Trump said of Powell in April 2025. “Europe has already ‘lowered’ seven times. Powell has always been ‘To Late,’ except when it came to the Election period when he lowered in order to help Sleepy Joe Biden, later Kamala, get elected. How did that work out?”
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