Fed Holds Rates Steady Amid Political Pressure as Powell Faces Trump’s Criticism

Federal Reserve Chair Jerome Powell testified before the Senate Banking Committee, maintaining the central bank's stance on keeping interest rates unchanged despite mounting political pressure. The decision comes as former President Donald TRUMP escalates his public criticism of Powell, whom he appointed in 2017 but now blames for costly interest rate policies.

Trump's remarks during Powell's testimony were characteristically combative, labeling the Fed chair as "mentally average" and "very stupid." The former president claims high interest rates are costing the government hundreds of billions in unnecessary payments and hinted at potential replacements when Powell's term ends in 2026.

Powell defended the Fed's position, warning that proposed tariff policies could trigger inflationary pressures. "Most forecasters expect a fairly substantial wave of price increases to come through to the consumer," Powell stated, pushing back against Republican calls for immediate rate cuts.