Trump "furiously" criticized the Federal Reserve for holding steady, promising to curb inflation through economic policies

According to the Zhitong Finance APP, after the Federal Reserve announced its first interest rate decision of the year, U.S. President Trump expressed strong dissatisfaction with its decision to keep interest rates unchanged. He posted on the social platform Truth Social, directly pointing out that Federal Reserve Chairman Jerome Powell and his team failed to address the inflation issue, promising to resolve the problem by unleashing U.S. energy production, reducing regulations, adjusting international trade policies, and revitalizing manufacturing.

Trump's criticism intensified his long-standing pressure on the Federal Reserve and continued his usual practice of directly intervening in monetary policy. Traditionally, U.S. presidents typically avoid publicly commenting on Federal Reserve policies to maintain the independence of the central bank.

However, the Federal Reserve still decided not to cut interest rates this time. In the statement, officials used more cautious language regarding the inflation issue, removing the previous statement about inflation "making progress toward the 2% target," only noting that inflation "remains slightly high." Powell stated at the press conference that recent inflation data is "good," but the Federal Reserve will not overinterpret short-term data fluctuations. He emphasized that the Federal Reserve will continue to act independently and refused to comment on Trump's remarks.

The Federal Reserve's decision to maintain interest rates in the 4.25%-4.5% range put pressure on the market. On Wednesday, all three major U.S. stock indices closed lower, with the Dow Jones Industrial Average down 0.31%, the S&P 500 down 0.47%, and the Nasdaq Composite down 0.51%. Meanwhile, consumer borrowing costs remain high, affecting various financial products from auto loans to mortgages. In December of last year, the U.S. Consumer Price Index rose 2.9% year-on-year, remaining above the Federal Reserve's 2% target.

Trump has made it clear that if he cannot achieve a rate cut through the Federal Reserve, he will implement economic policies to reach that goal. In a video speech at last week's World Economic Forum in Davos, he stated that he would "demand an immediate rate cut" and claimed that his understanding of interest rate issues far exceeds that of Federal Reserve officials.

Despite the ongoing pressure from Trump, he stated that he would not remove Powell from office before the end of his term. Powell, who was appointed by Trump in 2017, has experienced multiple tensions between the Federal Reserve and the government, with his term lasting until May 2026.

Since Trump left office in January 2021, the U.S. economy has undergone significant changes. During the COVID-19 pandemic, soaring inflation severely impacted consumers' financial situations, but it has significantly receded recently. In December of last year, the U.S. unemployment rate fell to 4.1%, slightly improving from the previous month's 4.2%, with the job market remaining resilient as businesses added over 250,000 jobs, alleviating concerns about a weak labor market.

Despite high borrowing costs, consumer spending remains stable. U.S. GDP has maintained over 3% growth for two consecutive quarters, indicating that the economy is still steadily expanding. However, Federal Reserve officials believe that the "last mile" of curbing inflation remains challenging, so there is currently no urgency to adjust monetary policy.

According to the Federal Reserve's forecast, there may be two rate cuts this year, following three previous meetings where rates were cut, bringing the benchmark rate down from a 20-year high of 5.25%-5.5% to the current 4.25%-4.5%. Powell stated on Wednesday that the Federal Reserve expects inflation to continue to decline slowly, but the process may experience fluctuations, so there is currently no need to rush to adjust policy Bankrate's Chief Financial Analyst Greg McBride pointed out: "Progress towards the 2% inflation target has stalled, and the Federal Reserve is well aware of this." He believes that the Federal Reserve did not hint at a rate cut in the March meeting after this meeting, and whether there will be a rate cut in the future will depend on a series of strong inflation data.

Economists warn that Trump's economic policies may complicate the Federal Reserve's decision-making, particularly regarding trade and tariff policies. Trump is expected to announce his first major tariff initiative this Saturday, which could have widespread implications for the U.S. economy.

When asked about the potential impact of tariff policies on the economy, Powell stated that the range of impacts is highly uncertain. "We do not know the duration, magnitude, countries involved, and possible retaliatory measures of the tariffs. We also cannot predict how it will affect consumers."

RSM Chief Economist Joe Brusuelas stated in a research report: "The Federal Reserve's decisions this year will be influenced by the Trump administration's trade and immigration policies. These policies could drive up inflation or, more importantly, raise inflation expectations, thereby threatening the Federal Reserve's long-standing 2% inflation target."