The U.S. President has been demanding that the Federal Reserve (Fed) reduce interest rates, labeling the Fed chairman Jerome Powell as “a loser” or “stubborn.”
Last week, Trump accused Powell of acting against the U.S. economy and advocated for a three-percentage point cut in interest rates.
However, Jerome Powell has assured that the President’s comments will not influence his decision, which will be announced later today, followed by a press conference.
Powell’s term as chairman of the Fed ends in May 2026, and he has expressed his intention to fulfill the role fully, despite threats of dismissal from Trump.
U.S. Treasury Secretary Scott Bessent has stated there is no immediate reason for Powell’s resignation.
Analysts believe that despite pressure from the White House, the Fed will not yield, anticipating that interest rates will remain unchanged.
The Global Head of Public Markets Investment at Allianz Global Investors, Michael Krautzberger, expects the Fed to leave interest rates unchanged according to a statement.
“The first six months of the Trump administration have been particularly turbulent for economic policymakers, marked by shocks and increased uncertainty. Expectations for growth and inflation in 2025 have shown high volatility […]. The latest U.S. macroeconomic data reflect the challenges facing the Federal Reserve,” he emphasized.
BPI also predicts that the Fed will maintain interest rates, highlighting the divergence of opinions within the Fed itself, with more cautious groups anticipating, at most, a rate cut this year, while the “more accommodative wing” projects at least two reductions.
Similarly, Gregory Daco, Chief Economist at EY-Parthenon, foresees the maintenance of rates but noted, “It will be interesting to see if Powell hints at potential monetary policy easing by the end of the year or if he avoids any indication.”
On June 18, the Fed once again left interest rates unchanged amid uncertainty about the impacts of U.S. tariffs.
The key interest rates of the U.S. central bank thus remained in the range of 4.25%-4.5%.
