Why is Trump so furious when the Federal Reserve refuses to cut interest rates?

The Federal Reserve recently made a decision to keep the federal funds rate unchanged in the range of 4.25% -4.50%. This is the fifth consecutive meeting of the Federal Reserve to maintain interest rate stability. Jerome Powell, this stubborn fool, must immediately cut interest rates significantly! If he continues to refuse action, the board should take over control! "On August 1, 2025, Trump posted on social media with intense language, like a bomb thrown into a calm lake, instantly making global financial markets tense.

The core of this conflict revolves around a simple question: Should we cut interest rates immediately? Trump believes that the US economy needs a "shot in the arm," while Federal Reserve Chairman Powell believes that further observation is needed. Trump's anger reached a boiling point after the Federal Reserve announced its interest rate decision on July 30th. He not only insulted Powell, but also made an unprecedented demand: for the Federal Reserve Board to "seize power" and take over monetary policy decisions.

This is not the first time Trump has pressured the Federal Reserve. Since 2018, his criticism of Powell has almost become a background sound in Washington. But this time is different - Trump holds more chips in his hands. Two members appointed by him in the Federal Reserve Board of Governors have voted against this interest rate resolution, advocating for an immediate 25 basis point rate cut. This is the first time since 1993 that two members of the Federal Reserve's decision-making team have simultaneously opposed mainstream resolutions.

In response to Powell's stubbornness, the White House has quietly initiated a "replacement process". Treasury Secretary Besson revealed that Trump may announce Powell's successor before the end of the year, although Powell's term will end in May 2026.

Trump's tariff policies are like stones thrown into an economic pond, with ripple effects yet to fully manifest. Powell pointed out that "retailers bear the majority of tariff costs, which may gradually be transmitted to consumers in the future. This uncertainty has led the Federal Reserve to adopt a wait-and-see approach, avoiding reckless actions that could trigger another surge in inflation.

The Fed's interest rate toolbox is not a simple switch, but a sophisticated regulatory device. Cutting interest rates can stimulate borrowing and investment, but it may also reignite inflation; Maintaining interest rates can help control prices, but may accelerate economic decline. Expert metaphor: "Cutting interest rates in advance is like giving fever patients antipyretic medicine - it can alleviate symptoms, but it conceals the true cause.

This conflict touches upon the core design of the US financial system: the independence of the Federal Reserve. The Federal Reserve System, established in 1913, deliberately placed monetary policy decisions outside of political cycles. Although the law allows the president to nominate Federal Reserve governors and chairmen, it explicitly states that once they take office, decisions should be based on economic data rather than political pressure.

Trump's tariff policy has exacerbated the dilemma faced by the Federal Reserve. On the one hand, tariffs push up the prices of imported goods, and theoretically, interest rates should be raised to curb inflation; On the other hand, tariffs also suppress economic growth, and theoretically, interest rate cuts should be implemented to stimulate the economy. The Federal Reserve is like walking on a blade, and any decision may come at a cost. For ordinary consumers, interest rate cuts may stimulate consumption, but they may also reignite inflation and push up daily expenses

When Trump demanded a rate cut, he focused on short-term economic growth and election benefits; When the Federal Reserve remains inactive, it safeguards price stability and the long-term health of the financial system.