Fed's rate-cut delay intact as inflation fears override Trump pressure

[groundloop]

Source: Reuters

The case for a U.S. interest rate cut remains unresolved as Federal Reserve officials head into their policy meeting later this month, with data showing fresh signs of higher inflation and President Donald Trump intensifying his demands for lower borrowing costs.

Trump appeared near the point of trying to fire Fed Chair Jerome Powell this week, but backed off with a nod to the market disruption that would likely follow, and the U.S. central bank's policy rate outlook remains virtually unchanged despite the drama.

Fed officials haven't mentioned raising rates, but headlines about an imminent Powell firing caused U.S. Treasury yields to jump, not exactly what Trump wants as he yearns for cheaper financing for massive federal deficits.

On Friday the president repeated his criticism of Powell and said the Fed's policy rate should be 1%, a low level typically used by the Fed to boost a weak economy not, as the Fed is currently attempting to do, temper inflation with tight monetary policy.

Read more: https://www.reuters.com/business/feds-rate-cut-delay-intact-inflation-fears-override-trump-pressure-2025-07-18/

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[bucolic_frolic]

1. Powell will deliver rate cuts in his waning months of tenure

He wants to be remembered well.

[dutch777]

3. Somehow I doubt he wants to make the bubbles in real estate and Wall Street even bigger than they are.

He of all people has to see the same charts of massive overvaluation in many markets and know that when the bubbles burst it will be even worse than the 2000 Dotcom and 2008 real estate debacles. He isn't able to, but if he wanted to do us all a favor he would raise rates by a percent by end of year.

[Mike 03]

2. FYI Upcoming Fed Meeting (via Google AI)

The next Federal Reserve meeting is scheduled for July 29-30, 2025. The meeting will include a decision on interest rates and a press conference with Fed Chair Jerome Powell.

Here's a breakdown of the key information:

Dates: July 29-30, 2025.
Purpose: The Federal Open Market Committee (FOMC) will meet to discuss and set monetary policy.
Interest Rate Decision: The FOMC will announce its decision on interest rates.
Press Conference: Following the announcement, Fed Chair Jerome Powell will hold a press conference.

Bloomberg radio (and I presume television) consistently covers these events well, with extended coverage and decent analysis.

[ananda]

4. This has made me happy.

I just re-upped a CD for five years at a good rate.

[FredGarvin]

5. The Fed has a 2% inflation mandate

Zero cred.

Makes zero sense to reduce rates.

[thesquanderer]

6. Inflation is rising again, and Trump wants to cut rates....

... as if tariffs and eliminating a low-cost immigrant labor force wasn't already inflationary enough.

I can't decide how much of this is that he really doesn't care a bit about inflation, vs. how much is that he really has no clue about how the economy works.