Fed Holds Interest Rates Steady Despite Trump's Push for Deep Cuts
The U.S. Federal Reserve opted on Wednesday to keep interest rates unchanged, maintaining its benchmark rate in the range of 4.25% to 4.50%.
The decision by the Federal Open Market Committee (FOMC), following a two-day meeting, contrasts sharply with Trump's repeated demands for aggressive rate cuts, calls that have intensified in recent weeks despite strong economic data.
Earlier in the day, Trump took to Truth Social, his social media platform, to urge the Fed to slash interest rates by 3 percentage points, arguing that the move was necessary to stimulate the housing market and capitalize on unexpectedly strong GDP growth.
'Second-quarter GDP just came in at 3%, much better than expected. Now the Fed must cut rates. No inflation! Let people buy homes and pay them off,' Trump posted.
According to new figures released by the U.S. Department of Commerce, the American economy expanded by 3.0% in Q2 2025, outpacing economists' expectations of 2.3%. The surge was driven largely by a rebound in consumer spending and a more favorable trade balance.
This comes after a mild contraction of 0.5% in Q1, the first negative quarter in three years, primarily attributed to a slowdown in household consumption. The Q2 rebound signals renewed momentum, but the Fed remains cautious.
Despite the positive economic data and political pressure, the Fed reiterated its commitment to data-driven policy decisions, suggesting that current rates strike the right balance between supporting growth and containing potential inflation risks.
Fed Chair Jerome Powell, speaking at a post-meeting press conference, said: 'We welcome signs of economic resilience, but remain vigilant. Our stance reflects both progress and caution, we're not seeing clear evidence yet that rate cuts are warranted.'
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