The Federal Reserve is set to announce its latest decision on interest rates, following President Donald Trump’s unusual visit to the central bank. The Fed has held interest rates steady for seven consecutive months, taking a wait-and-see approach as it voices concern about a possible burst of inflation due to Trump’s tariff policy. Investors peg the chances of interest rates holding steady at an overwhelming 97%, according to the CME FedWatch Tool. Trump has repeatedly urged the central bank to lower interest rates, saying the policy would boost economic performance and reduce interest payments on government debt. The Fed attributes spending overruns tied to the central bank’s $2.5 billion building renovation project to unforeseen cost increases.
Federal law allows the president to remove the Fed chair for “cause,” though no president has ever done so. Powell’s term as chair is set to expire in May 2026. The Fed is guided by a dual mandate to keep inflation under control and maximize employment. In theory, a lowering of interest rates could help stimulate economic activity and boost employment, especially while inflation remains modest.
