By Greg Robb
Treasury Secretary says Fed seems ‘frozen at the wheel’
President Donald Trump has continued to put pressure on Federal Reserve Chair Jerome Powell to dramatically lower interest rates.
At a Monday press briefing, White House Press Secretary Karoline Leavitt held up a handwritten note to the Fed leader from the president.
The letter suggested that Trump thinks the Fed’s benchmark rate should be between close to 0.5%, down from its current range of 4.25% to 4.5%.
The note read: “Jerome, You are, as usual, ‘too late.’ You have cost the USA a fortune – and continue to do so – You should lower the rate – by a lot. Hundreds of billions of dollars being lost. No Inflation”
Powell has been pushing back on rate cuts all year, saying he wants to wait to learn more about “the likely course of the economy” from the president’s tariff policy.
The Fed will meet again in July to consider a rate cut. The market is pricing in only about a 20% chance of a cut at that meeting, after a key inflation measure released last week was slightly hotter than expected.
Traders are now pricing in three quarter-point cuts at the Fed’s final three meetings of the year, starting in September. Analysts at JPMorgan say the reasons behind the cuts may not be supportive for stocks.
Earlier Monday, other top White House officials also kept up the criticism of Powell.
Treasury Secretary Scott Bessent said in a Bloomberg interview that Fed officials “seem a little frozen at the wheel.”
Bessent said the Fed was too worried about making another mistake like its failure to see high inflation brewing in 2022.
Powell’s term as Fed chair ends next May. In the interview, Bessent said the White House will be working “over coming weeks and months” on choosing Powell’s successor.
Additionally, Fed Governor Adriana Kugler’s term at the central bank is up at the end of January. Bessent said the White House might use the vacancy created by Kugler’s departure to put Powell’s replacement on the Fed’s seven-member board of governors.
Bessent is considered to be on the short list of possible replacements for Powell.
Asked about this possibility, Bessent said: “I will do what the president wants, but I think I have the best job in D.C.”
-Greg Robb
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06-30-25 1609ET
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