Federal Reserve Chairman Jerome Powell stated on Tuesday that interest rates would have likely been lowered this year if it weren’t for President Donald Trump’s significant policy changes. Speaking at a central banking forum in Portugal, Powell said he believes the Fed wouldn’t have cut rates by now due to Trump’s tariffs.
The Fed has maintained its wait-and-see approach, but Trump has repeatedly criticized Powell and other central bankers for not lowering rates, despite the economic impact of tariffs being uncertain. Despite this, two Fed officials have suggested that rate cuts could be considered as early as July, with a 81% chance of rates remaining steady at the upcoming meeting.
Powell emphasized that most Fed officials expect to lower rates later in the year, depending on inflation and labor market conditions. However, he declined to speculate on whether July would be too soon for a rate cut. European Central Bank President Christine Lagarde praised Powell’s approach, saying he embodies the standard of a courageous central banker.
Powell avoided commenting directly on Trump’s attacks, stating that he is focused on doing his job and maintaining a non-partisan approach to monetary policy. He stressed that the Fed’s primary goal is delivering macro stability, financial stability, and economic stability for all people, without taking sides or getting involved in issues beyond its expertise.
Source: https://edition.cnn.com/2025/07/01/economy/jerome-powell