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In an unexpected shift, former President Donald Trump said he believes Federal Reserve Chair Jerome Powell may now be open to lowering U.S. interest rates. Trump made the remarks following a rare visit to the Fed’s headquarters on July 24 and described the meeting as surprisingly constructive YouTube+13Reuters+13The Australian+13.
“We had a very good meeting… I think we had a very good meeting on interest rates,” Trump shared, interpreting Powell’s comment—“Congratulations, the country is doing really well”—as a signal of openness towards future rate cuts The Times+4Reuters+4Reuters+4.
What Sparked This Change?
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Tensions Made Public: Trump previously called Powell a “numbskull” for resisting rate cuts and criticized a costly $2.5 billion renovation project at the Fed that he claimed had ballooned to $3.1 billion The Australian+6The Times+6Reuters+6.
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Recent Meeting: Their face-to-face meeting at the Fed building reportedly focused on the renovation’s cost and broader policy direction. Though heated at times, Trump later downplayed discord and emphasized the constructive tone of the discussion Financial Times+15Barron’s+15Reuters+15.
What’s the Fed’s Position?
Despite Trump’s optimism, the Fed is expected to maintain the federal funds rate at 4.25%–4.50% at next week’s policy decision, signalling that any rate cuts will hinge on incoming economic data Business Insider+11Reuters+11Al Jazeera+11. Chair Powell has underscored the bank’s need for more evidence before altering its stance.
Independence Under Pressure
Market watchers remain wary. Observers like Jamie Dimon, JPMorgan’s CEO, have urged respect for central bank independence amid political pressure Business Insider+1Barron’s+1The Guardian. A recent analysis in the Financial Times warned that jostling Powell could backfire, increasing inflation expectations and long-term rates—not reducing them The Times+15Financial Times+15Barron’s+15.
Why It Matters
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Markets May React: Rate cuts could boost rate-sensitive sectors like real estate and tech, while failure to cut—or perceived political interference—could destabilize markets.
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Policy Uncertainty: Traders are watching both White House signals and Fed communications closely for clues about monetary policy direction.
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Precedent Setting: Any push against Powell’s independence could test long-held norms about the Fed’s autonomy.
Trump nonetheless stated that he has no intention of firing Powell before his term ends in May 2026, despite previously floating the possibility and crafting a letter to dismiss him—something legal experts say he lacks authority to do Business InsiderThe Australian+2en.wikipedia.org+2Financial Times+2New York Post+2en.wikipedia.org+2Fox Business+2.
Key Takeaways
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While Trump believes Powell could be preparing to lower rates, the Fed is maintaining its current position pending fresh data.
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The Treasury-independent Fed doctrine remains crucial—undermining it may carry unintended long-term costs.
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Financial markets will closely monitor upcoming inflation reports, Fed communications, and any further signals from the White House.
CentBit.Online will stay on top of this evolving monetary tug-of-war and its implications for global markets, including cryptocurrencies.
