President Donald Trump told Federal Reserve Chair Jerome Powell at a White House meeting on May 29 that the central bank chief erred in not lowering borrowing costs, while Powell said decisions on interest rates would remain grounded in economic data and free from political influence.
“Chair Powell said that he and his colleagues on the FOMC [Federal Open Market Committee] 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 Fed said.
The central bank’s benchmark interest rate currently stands at 4.25 to 4.5 percent.
The meeting, held at Trump’s request, came amid intensifying pressure from the president to ease monetary policy. Trump has said that rates are too high given that inflation has dropped significantly and that Powell should cut them further—a move the president believes would help boost economic competitiveness, particularly against rivals like China.
White House press secretary Karoline Leavitt told reporters at a briefing after the meeting that Trump “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.” She added that the president has been “very vocal” about that both in public statements and in private meetings.
Leavitt also confirmed that Trump did not discuss firing Powell or replacing him before his term expires in May 2026. Speculation has been swirling over who might succeed Powell, with Treasury Secretary Scott Bessent recently suggesting the White House would begin a search this fall. Bessent floated the idea of appointing a “shadow Fed chair” to help guide market expectations during the transition, although the Treasury chief has also said Powell should be allowed to serve out his term.
Thursday’s meeting at the White House marked the first official sit-down between Trump and Powell during the president’s second term. While such encounters are rare due to the Fed’s politically independent mandate, they are not unprecedented. Trump previously hosted Powell for lunch during his first term.
“I would like to see him be a little more active,” Trump said during an Oval Office ceremony on April 22. “This is a perfect time to lower interest rates.”
Trump’s pressure on Powell to drop rates comes as inflation has fallen significantly from recent highs.
“Risks to real activity were seen as skewed to the downside,“ the minutes read. ”And the staff viewed the possibility that the economy would enter a recession to be almost as likely as the baseline forecast.”