Trump urgently wants Jerome Powell to cut interest rates. That won’t happen today, economists say.

President Trump’s ongoing battle with the Federal Reserve over interest rates has dominated headlines in recent months. The president has been vocal in his calls for lower rates, arguing that it would boost economic growth. However, Federal Reserve Chair Jerome Powell has stood firm in his decision to keep rates unchanged, citing a solid economy and the potential impact of tariffs on inflation.

The tension between Trump and Powell came to a head during a meeting last week, where the president reiterated his demand for lower interest rates. Despite the pressure from the White House, economists predict that the Fed will maintain its benchmark rate at its upcoming decision. The central bank has kept rates steady since December 2024, as policymakers aim to control inflation.

Trump’s argument for rate cuts has been bolstered by recent moves from other central banks around the world. The European Central Bank and the Bank of England have both cut rates this year, prompting the president to push for similar actions in the U.S. However, rising inflation, driven in part by tariffs, has complicated the Fed’s decision-making process.

The Federal Reserve’s decision on interest rates is made by the 12-person Federal Open Market Committee, with a majority vote determining the outcome. While some members of the committee have expressed support for rate cuts, the overall consensus is to maintain the status quo. The Fed is unlikely to cut rates at its upcoming decision, given the strong economic data and the threat of inflation.

Powell has faced intense pressure from the Trump administration to lower rates, but he has remained steadfast in his commitment to data-driven decision-making. The Fed chair is expected to address questions about political pressure during his press conference following the rate decision. Powell’s term as chair ends in May 2026, raising speculation about his future at the central bank.

Looking ahead, economists believe that the Fed is more likely to lower rates at its September meeting. The ongoing trade tensions and the potential for a slowdown in the economy could prompt the central bank to take action. For now, the Fed is focused on maintaining stability and keeping its options open in case conditions deteriorate. The Federal Open Market Committee (FOMC) has decided not to hold a meeting in August, meaning that the next opportunity for a rate cut will be at the September meeting. Economists are predicting a 0.25 percentage point reduction, which would bring the federal funds rate down to a range of 4% to 4.25%.

According to economist Daco, the Fed is not facing any immediate pressure to make a move, so it is likely that they will wait until September to implement the next rate cut. Daco believes that there will be two rate cuts in 2025, followed by an additional 100 basis points of easing in 2026 as economic and labor market conditions worsen.

This cautious approach by the Fed reflects their desire to carefully monitor economic indicators before making any significant changes to interest rates. By waiting until September, the Fed can gather more data and ensure that any rate cuts are made in response to concrete evidence of economic weakness.

As investors and analysts await the September meeting, they will be closely watching for any signals from the Fed regarding their future monetary policy decisions. The uncertainty surrounding global economic conditions and trade tensions will likely play a significant role in shaping the Fed’s approach in the coming months.

Overall, the decision to postpone a rate cut until September reflects the Fed’s commitment to making informed and strategic decisions that will support economic growth and stability in the long term. Stay tuned for updates following the September meeting to see how the Fed’s decisions impact the financial markets and the broader economy.