'Went on hold': Powell blames Trump for high interest rates
U.S. Federal Reserve Chair Jerome Powell testifies before a Senate Banking, Housing and Urban Affairs Committee hearing on "The Semiannual Monetary Policy Report to the Congress," on Capitol Hill in Washington, D.C., U.S., June 25, 2025. REUTERS/Kevin Mohatt/File Photo
Federal Reserve Chair Jerome Powell said at a Tuesday forum that the Federal Reserve would likely have lowered interest rates if not for President Donald Trump’s announcement of extreme tariffs.
Mediaite posted a link to the interview, courtesy of CNBC’s coverage of Powell speaking at an economic forum in Portugal. Powell was among a small panel discussing the world economy when he was asked directly if the Fed had been considering lowering interest rates prior to Trump’s tariff announcements in April.
“So, I do think that’s right. In effect, we went on hold when we saw the size of the tariffs; and, essentially, all inflation forecasts for the United States went up materially as a consequence of the tariffs,” said Powell, insisting the Fed did not overreact to the tariff announcement when it opted to hold rates steady.
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“In fact, we didn’t react at all. We’re simply taking some time. As long as the U.S. economy is in solid shape, we think the prudent thing to do is to wait and learn more and see what those effects might be,” Powell added.
Trump, who put Powell in charge of the Fed during his first term, has been calling for his removal after Powell and the Fed refused to accommodate the president with lower interest rates. Trump recently took to Truth Social, complaining Powell and the rest of the Federal Reserve board of governors “should be ashamed of themselves” for declining to lower interest rates.
“They have one of the easiest, yet most prestigious, jobs in America, and they have FAILED — And continue to do so,” Trump wrote, while attaching a list of World Central Bank Rates for nations, which had the U.S. as “No. 35.”
“You should lower the rate — By a lot,” Trump wrote with what looked like a black Sharpie on the attachment.
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Read the full Mediaite report at this link.
