Don’t expect the Fed to lower interest rates this week despite string of harsh criticism from Trump

The Federal Reserve is likely to retain the basic short -term interest rate unchanged on Wednesday, despite the weeks of cruel criticism And it is demanded from President Donald Trump that the Fed reduces borrowing costs.

After causing a sharp collapse in financial markets two weeks ago by saying he could burn the seat Jerome Powell, following Trump's backing offand saidHe had no intention of doing so. However, he and Treasury Secretary Scott Bessent said the Fed should cut rates.

They argue that inflation is constantly cooled and high cost of borrowing is no longer required to prevent price increases. The Fed strictly stabbed its short-term rates in 2022 and 2023 while pandemic-de inflation was spiked.

Separate, Elon Musk, the leader of TrumpDepartment of governmental efficiencyLast Wednesday it was suggested that the Doge should look closer to the Fed spending on its facilities.

The increased investigation shows that even though the Trump administration has turned away its threats to Powell's fire, the Fed is still subject to unusual sharp political pressures, despite its status as an independent agency.

Although, the Fed will almost definitely leave a key rate that will not change at about 4.3% when it meets Tuesday and Wednesday. Powell and many of the other 18 officials sitting on the Fed Rate setting committee said they wanted to see how Trump's tariffs wereaffects the economyBefore making any motions.

However, Trump said Friday on the social media platformSOCIETY OF SOCIETYWith no “no inflation” and claimed that grocery and egg prices had fallen, and that gas dropped to $ 1.98 a gallon.

That's not entirely true: grocery prices jumped 0.5% to two in the past three months and climbed 2.4% from a year ago. Gas and oil prices refused-gas costs dropped 10% from one year ago-the continuation of a longer-term pace that continued in part out of fear that the economy has weakened. However, the AAA said gas prices nationwide average $ 3.18 a gallon.

Made of inflationDrop noticeably in March.

Without tariffs, economists say it is possible for Fed to reduce its benchmark rate, as it is currently at a level intended to slow borrowing and spending and cool inflation. However the Fed cannot reduce rates on Trump's wide tariffs that are likely to raise prices in the coming months.

Vincent Reinhart, chief economist at BNY, said the Fed was “scarred” in the incident in 2021, when prices rose amidst snarls and powell supplies and other Fed officials whose increase was likely “transitors.” Instead, inflation rose to a peak of 9.1% in June 2022.

At this time they will be more careful, he said.

“That is a fed to wait for evidence and be slow to adjust that evidence,” Reinhart said.

Plus, Trump's Badgering Powell does thisMore difficult for the fed chair to cute the ratesSince doing this anytime soon can be seen as knuckling under the White House, Preston Mui, a economist in Employed America, said.

“You can imagine a world where there is no pressure from the Trump administration and they cut off the rates … Earlier, because they were comfortable doing the argument they were doing because of the data,” he said.

For his part, Powell saidLast monthThose tariffs are likely to push inflation and slow the economy, a tricky combination for Fed. The central bank usually increases rates – or at least keep them elevated – to fight inflation, as it cuts them to provoke the economy if unemployment increases.

Powell said the impact of inflation tariffs could be temporary-a increase of one-time price increase-but the latest said it was “could be more patient.” That suggests that Powell wants to wait, potential for months, to ensure that tariffs do not continue to raise inflation before considering a cutting rate.

Some economists expect the Fed not to cut rates until the meeting this September, or even eventually.

But Fed officials can move earlier if tariffs hit the economy enough to cause disappearances and push unemployment. Wall Street investors appear to expect such an outcome – their project that the first cut will take place in July, according toFutures pricing.

Separately, Musk criticized Fed Wednesday for spending $ 2.5 billion in a wide repair of two of its buildings in Washington, DC

“Since the end of the day, it is all taxpayer money, we should be sure to see if the Federal Reserve has spent $ 2.5 billion in their interior designer,” Musk said. “That's a brow raiser.”

Fed officials acknowledge that the cost of renovations has increased as prices for building and manufacture materials spy in the middle of post-sandmic inflation. And former Fed officials, speaking in the background, said local regulations forced the Fed to do more to expand underground, rather than make buildings higher, which added to the cost.

Meanwhile, Kevin Warsh, a former Fed governor and a potential candidate to replace Powell as a seat when Powell's term expires next year, said recently that the Fed attracts a greater investigation because of its failure to keep prices on check.

“The current Fed wounds are largely damaged by self,” he said in a speech during a conference on the fund funding conference in late April, where he brought the Fed for participation in a global climate change forum. “A strategic reset is necessary to alleviate credential losses, erection changes, and most important, worse economic results for our fellow citizens.”

Powell, for his part, said last month that “Fed Independence is widely understood and supported in Washington, in Congress, where it is important.”

This story was originally featured on Fortune.com