Federal Reserve Chair Jerome Powell is facing renewed scrutiny after the Fed declined to cut interest rates at its most recent Federal Open Market Committee (FOMC) meeting—despite a string of indicators suggesting the U.S. economy may be in a position to handle lower borrowing costs.
The Fed’s decision comes as key economic measures trend in a direction that would traditionally support easing:
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Inflation has fallen sharply from its 2022 peak, with the latest Consumer Price Index (CPI) showing 2.3% year?over?year growth, near the Fed’s stated 2% target.
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Unemployment remains low at 3.8%, reflecting a still?resilient labor market.
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GDP growth has stabilized, with Q2 estimates showing a 2.1% annualized increase, signaling a soft?landing scenario that would typically allow for rate cuts.
Critics argue that the Fed’s move undermines President Donald Trump’s efforts to sustain what could become one of the most robust economic expansions in recent history.
The vote was notable for its lack of consensus: for the first time in three decades, two members of the Fed board dissented.
During the press conference following the meeting, one reporter pressed Powell directly:
“What kind of economic data does the Fed need to see before you’ll be ready to cut…?”
Powell’s answer offered little clarity, instead delivering a word salad that would have made Kamala Harris proud.
Fed Chair Powell struggles to explain what it would take to cut interest rates pic.twitter.com/dnRs7Zd6qN
— Chief Nerd (@TheChiefNerd) July 30, 2025
The lack of a clear explanation has fueled accusations that Powell’s decision-making is being influenced by political considerations. Critics point out that in 2024—when Joe Biden was in the White House—the Fed cut rates three times (September, November, and December) despite persistently high inflation and weaker overall economic conditions.
Those cuts, they argue, helped prop up the economy in an election year. This time, however, Powell has taken the opposite approach under a Trump administration, leading some to question whether the Fed’s independence has been compromised.
Powell has insisted that the Fed remains data-driven, but his latest comments have done little to quiet concerns that the central bank is prioritizing political interests over economic realities.