The Federal Reserve is preparing to announce the interest rate amid an ongoing war between Trump and Powell
Federal Reserve, on Tuesday and Wednesday, while it is widely expected that the US central bank will keep interest rates unchanged in the range of 3.5% to 3.75%.
The Federal Open Market Committee had reduced the key interest rate by 75 basis points in the months of September, October and December 2025, amid increasing political pressure and ongoing legal disputes related to the central bank.
The US President, Donald Trump, has repeatedly called on the Federal Reserve. to lower interest rates, while his administration opened a criminal investigation into his boss Jerome Powell.
State of the US Economy
Recent US economic data point to strong growth, with inflation remaining above the Federal Reserve’s target and employment growth slowing.
Last December witnessed a rise in the number of non-farm jobs by 50 thousand jobs, which is much lower than expectations, bringing total job growth to 584 thousand jobs in 2025, while the unemployment rate fell to 4.4% in December 2025 from 4.5% in the previous month.
On the other hand, the country’s consumer price index rose 0.3% month-on-month and 2.7% year-on-year in December, in line with expectations, but still above the central bank’s 2% inflation target.
The US economy saw growth of 4.4% in the third quarter of 2025, exceeding expectations and recording its fastest performance since the third quarter of 2025. 2023.
Trump’s conflict with the central bank
Federal Reserve Chairman, Jerome Powell, stated this month that the US Department of Justice threatened to file criminal charges against him related to the renovation of the Federal Reserve buildings, stressing that the allegations against him were politically incited.
Powell reaffirmed that he is performing his duties without any political pressure or favoritism, focusing only on price stability and achieving maximum employment.
He believes Analysts believe that the investigation into Powell is a clear escalation by the Trump administration of pressure on the Federal Reserve to lower interest rates.
Former Federal Reserve chairs, along with leaders of Global central banks have warned that such actions pose a direct threat to the independence of the Federal Reserve.
Who will succeed Powell?
Since the beginning of his second term, Trump has on more than one occasion expressed his criticism of monetary policy, claiming that interest rates have not been lowered as much as he would like, and has directed repeated insults at Powell, declaring that he will soon announce his successor.
While Powell’s term ends in May of this year, Trump wants a president The Federal Reserve may lower interest rates according to its desire.
Trump said in a lengthy post on the platform "Truth Social" Late December: "No one who disagrees with me will be Chairman of the Federal Reserve".
Among the potential candidates to head the Federal Reserve: Rick Reeder, chief investment officer at the company "Black Rock" The American asset management giant, Christopher Waller, a member of the Federal Reserve Board, and Kevin Warsh, a former member of the Federal Reserve Board.
Trump also stated his desire for Kevin Hassett, director of the National Economic Council, to remain in the White House.
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