Powell's "Three No's" Principle: No Predictions, No Compromises, No Proactive Meetings

Original Title: Trump Meets Powell: Fed Chair Reaffirms Commitment to Non-Political Rate Decisions

Original author: Sham

Source of the original text:

Compiled by: Daisy, Mars Finance

Trump met with Federal Reserve Chairman Powell, but did not formally discuss monetary policy.

Trump continues to pressure the Federal Reserve to cut interest rates and stated on Truth Social that Powell "acted too late."

Due to the Federal Reserve's firm stance amid tariff concerns, the market does not expect a rate cut before September.

On Thursday, President Trump finally met with Federal Reserve Chairman Jerome Powell, breaking his silence since returning to the White House. The meeting, held at Trump's request, touched on routine topics — employment, inflation, and the overall economic situation — but according to the Federal Reserve, discussions on monetary policy were not included. Theoretically speaking.

The Federal Reserve stated in a brief announcement that Powell "did not discuss" his expectations for the direction of interest rates and kept the discussion highly generalized. He only talked about the facts and made no predictions. He reiterated that policy decisions will depend on the latest economic data — not political pressure. The Federal Reserve added that its decision-making process remains "cautious, objective, and non-political." Whether you believe it or not... depends on who you ask.

Trump hopes to lower interest rates immediately

The White House is not in a hurry to provide details. This is not surprising. But the timing is delicate. Trump has been criticizing the Federal Reserve—especially on Truth Social—demanding significant interest rate cuts. He states that the economy needs stimulus. Meanwhile, the Federal Reserve is walking a tightrope between stabilizing prices and job growth, while Trump's new tariffs could exacerbate inflation.

Trump's May 17 post was unequivocal: "Powell who acted too late," he slammed, calling the Fed chairman "legendary" in terms of delay. The all-caps quote is full of Trump's signature hyperbole. Has it affected the market? There is controversy, but the message is loud and clear – he is going to cut rates now.

Powell will not seek a meeting voluntarily.

This was Trump's first official meeting with Powell since the start of his new term. Powell said in early May that he would not ask for a meeting. "A meeting with the president was never requested. Not in the future," he told reporters. So yes, this time it was Trump's idea.

The next possible action of the Federal Reserve

Currently, the Federal Reserve may pause further interest rate cuts until the outlook becomes clearer. As tariffs continue to cast a shadow over economic forecasts, traders are betting that the next real opportunity for a rate cut will come in September— with June or July looking unlikely. The Federal Reserve had cut rates by a full percentage point by the end of 2024, but has since remained in a wait-and-see mode.

The market is tense and anxious, and Trump's remarks are adding fuel to the fire. Whether Powell and his team will hold their ground or yield to pressure could determine the economic direction before 2026. Currently, the Federal Reserve maintains a neutral stance. But political factors? Not so much.