Breaking: Federal Reserve Makes Decision on Interest Rate Cuts, Trump Will Not Be Happy

President Donald Trump has been clear that he wants Jerome Powell, the Chairman of the Federal Reserve, to cut interest rates to stimulate the economy, and he’s even threatened to fire him. On Wednesday, however, the Fed announced that they are not making any cuts at this time.

BREAKING: The Federal Reserve held interest rates steady on Wednesday, just weeks after Pres. Trump intensified calls for lower borrowing costs and voiced eagerness about the potential "termination" of Fed Chair Jerome Powell.

Read more: https://t.co/WAl9Q8lpXX pic.twitter.com/CqSoudKY1S
— ABC News (@ABC) May 7, 2025

In a statement, the Board of Governors of the Federal Reserve System announced that they consider economic activity to be expanding at a solid pace and don’t see the need to raise rates that might lead to increased inflation:

Although swings in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace. The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid. Inflation remains somewhat elevated.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook has increased further. The Committee is attentive to the risks to both sides of its dual mandate and judges that the risks of higher unemployment and higher inflation have risen.
In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent.

Despite their apparently rosy outlook about economic expansion, they also opined that tariffs are causing tensions in the economic world:

“Uncertainty about the economic outlook has increased further,” officials said in their post-meeting statement, the first since President Trump imposed sudden tariff increases last month. “The committee … judges that the risks of higher unemployment and higher inflation have risen.”

Breaking: China Announces It's Coming to the Tariff Negotiating Table This Weekend

Some, including Steve Forbes, a one-time presidential candidate and editor-in-chief of Forbes magazine, disagreed with the Fed’s restraint:

NEW: The Federal Reserve must cut reserve rates "loudly and immediately."

“The Fed must jettison its prosperity-causes-inflation superstition and commit, in plain English, to a stable dollar. Gold is the yardstick.”https://t.co/mmmlWppKfC pic.twitter.com/F50QCrUJXe
— Steve Forbes (@SteveForbesCEO) May 7, 2025

Although the president has not yet weighed in on this announcement, expect him to be displeased based on his previous statements:

🚨BREAKING: President Trump slams Fed Chair Jerome Powell, says he is always too late and wrong & his termination cannot come fast enough, urges immediate rate cuts. pic.twitter.com/p50NiAbO5j
— DogeDesigner (@cb_doge) April 17, 2025

As of this writing, the stock market reaction is muted, with the Dow Jones Industrial Average up approximately 270 points (.66 percent). We now wait to see how Trump responds.

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