Powell tells Trump that Federal Reserve’s interest rate policy will depend on data and outlook

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Jay Powell, the chair of the Federal Reserve, told Donald Trump that US monetary policy would be dictated solely by economic data and the outlook, as they held their first meeting of the president’s second term.

The talks between Trump and Powell follow pressure from the US president on the central bank chair to lower interest rates in order to blunt the impact of the administration’s trade policies.

According to the Fed, Powell “did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook”.

The US central bank said Powell had been invited by Trump to the White House to “discuss economic developments including for growth, employment, and inflation”.

“Chair Powell said that he and his colleagues on the FOMC will set monetary policy, as required by law, to support maximum employment and stable prices and will make those decisions based solely on careful, objective, and non-political analysis,” the Fed said, referring to the interest rate-setting Federal Open Market Committee.

Trump has in the past considered removing Powell from his post as Fed chair before his term ends in May 2026 — a possibility that has unnerved markets by calling into question the Fed’s independence.

But the US president last month said he had “no intention of firing [Powell]”, in comments that soothed investors.

This is a developing story