Hailey Whitlock, Staff Writer 

On Jan. 29, 2025, the Federal Reserve refrained from lowering interest rates in an attempt to curb inflation. According to the Wall Street Journal, the Federal Reserve lowered interest rates by a full percentage point over the last three meetings of 2024, leading to the unanimous decision to keep the benchmark rate of 4.25% to 4.5% to come under question by President Trump. 

On the same day as the decision, as stated in the Wall Street Journal, President Trump posted on his social media platform, “Because Jay Powell and the Fed failed to stop the problem they created with inflation, I will do it.”

Powell, the current chair of the Federal Reserve, was appointed by President Trump to the position in 2017, and reappointed by President Biden in 2021. Powell has been critiqued by President Trump in the past due to not cutting interest rates at a swift enough pace to align with his endeavors. 

As reported by Forbes, his term as the head of the Federal Reserve will expire in May 2026 with his term on the Federal Reserve set to expire in 2028. 

In response to the critical statement by President Trump, as referenced by NPR, Powell stated, “I’m not going to have any response or comment whatsoever on what the president said. The public should be confident that we will continue to do our work as we always have.”

This statement ties back to a core tenet of the Federal Reserve: political independence. The Federal Reserve was created to function independent of the sitting president, emphasized by the fact that appointments to the Federal Reserve are 14 years on a rotating basis so that a new member is chosen once every two years; by the time one president could nominate enough members to compose a majority, they would be leaving office, even with a two term presidency. 

Indeed, the true level of independence the Federal Reserve has is debated as President Trump places increasing pressure on Powell and the Federal Reserve to cut rates. 

In the past, as documented by CNBC, President Trump stated, “I’ll demand that interest rates drop immediately.” He also indicated a belief that the president should have a say in regard to interest rates and that the Federal Reserve should listen to him on the matter (CNBC). 

Powell remains insistent that changes should be made due to the statistics as opposed to dictates by the president, however. 

As mentioned in the Wall Street Journal, Peter Conti-Brown, a Federal Reserve historian at the University of Pennsylvania stated, “In the poker game he might be playing with Donald Trump, there are places where Jay Powell is willing to fold, and there are places where he is not. Subordinating the FOMC to the whims of a sitting president is not something Jay Powell will do.” 

Speculation exists that the decision to keep interest rates stable was in response to President Trump’s favored policies, which may lead to a rise in inflation. However, Powell dismissed these concerns, stating such a motive as premature. 
According to NPR, when questioned about how President Trump’s potential policies will influence the Federal Reserve’s decisions, Powell said, “We don’t know what will happen with tariffs, with immigration, with fiscal policy and with regulatory policy. We’re going to be watching carefully as we always do.”