Trump Presses Fed Chair Powell On Interest Rates In Person

President Donald Trump isn’t letting up the pressure to cut interest rates.

The White House said Trump met with Federal Reserve Chair Jerome Powell Thursday for the first time during the president’s second term. During the meeting requested by the president, Trump reportedly criticized Powell for not lowering the Fed’s benchmark federal funds interest rate.

“The president did say that he believes the Fed chair is making a mistake by not lowering interest rates, which is putting us at an economic disadvantage to China and other countries,” said White House spokeswoman Karoline Leavitt at a press conference Thursday afternoon.

The Fed has kept its key interest rate at an elevated level this year to discourage borrowing and spending and combat inflation.

Trump has frequently demanded that the central bank lower interest rates, which could at least temporarily boost the economy. Powell, for his part, said the Fed would make its decisions based on economic, not political, considerations.

“Powell said that he and his colleagues on the FOMC will set monetary policy, as required by law, to support maximum employment and stable prices and will make those decisions based solely on careful, objective, and non-political analysis,” the Federal Reserve said in a statement about Thursday’s meeting.

Meetings between the Fed chair and the president have been fairly infrequent in recent years. Powell met Trump’s predecessor, former President Joe Biden, in 2022 and then went at least two years without seeing him face to face.

Trump Has Threatened Fed Independence In Second Term

Powell and Trump often clashed this year over interest rates and the independence of the Federal Reserve.

Trump threatened to fire Powell at one point but has stepped back from that in recent weeks. Powell has said he would not step down if Trump asked and has defended the Fed’s status as an independent organization with a reputation for staying above the political fray.

The Supreme Court gave Powell’s argument a boost last week when it noted in an unsigned court order that Trump may have the power to remove heads of other independent agencies, but “The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States.”

The President has influenced Interest Rate Policy—Just Not In the Way He Wants

The Fed’s policy body, the Federal Open Market Committee, consists of members appointed by the president and some by the boards of the regional banks that make up the Federal Reserve System. Trump appointed Powell as Fed chair in his first term, and Biden gave him a second four-year term in 2022.

The Fed has been reluctant to lower interest rates partly out of fear that Trump’s tariffs will reignite the high inflation that took hold in the wake of the pandemic, and which has just about simmered down to the Fed’s goal of a 2% annual rate.

Lower interest rates would put downward pressure on credit card, car loan, and other debt rates and could also indirectly influence mortgage rates.