- Powell won’t rule out a July rate cut, signaling a possible shift in the Fed’s stance.
- Trump is publicly pressuring the Fed to drop rates to 1%, calling current levels too high.
- Most Fed board members expect two rate cuts before the end of 2025, with the next meeting coming up at the end of July.
Federal Reserve Chair Jerome Powell might just be warming up to the idea of a rate cut—possibly sooner than many expected. On Tuesday, while speaking at a panel during the European Central Bank forum in Portugal, Powell said he wouldn’t rule out a cut at this month’s Fed meeting. “I wouldn’t take any meeting off the table or put any on the table,” he said. “It depends on how the data evolve.”
That’s about as non-committal as it gets—but still, it’s a notable shift, especially with markets watching closely. His comments come just as President Trump has reignited his campaign to push the Fed into slashing rates, saying on Monday that Powell and other central bankers “should be ashamed of themselves.”
Trump’s post even featured a handwritten note—complete with his signature—urging Powell to drop interest rates to 1%, or even lower. That’s a dramatic contrast to the current benchmark range of 4.25% to 4.5%, where rates have remained steady for months now.
“I’m Just Doing My Job,” Powell Says
Asked about Trump’s jabs, Powell didn’t bite. “I’m very focused on just doing my job,” he responded, drawing some applause from the crowd. He also doubled down on the Fed’s twin goals: controlling inflation and promoting maximum employment. That’s the mandate, politics aside.
Christine Lagarde, head of the European Central Bank and also on the panel, backed Powell. “The exact same thing,” she said, when asked what she’d do in his shoes. “All of us would.”
Fed Still Eyeing Rate Cuts in 2025
So far, the Fed’s been playing it cautious. No rate moves in the last four meetings. But the outlook is shifting. Powell confirmed that most policymakers at the Fed still believe cuts will happen this year—two quarter-point drops, in fact, just as they projected back in March.
That means July’s meeting—set for the 29th and 30th—could be the first domino. With inflation softening and Trump’s tariffs stirring uncertainty, some on the board feel it’s time to start trimming.
Still, Powell made it clear: nothing’s locked in. It’ll all come down to what the data says.
