The Fed Faces Increasing Rate Hike Pressure, Trump May Not Target Powell

July 30th. Foreign media analysis indicated that U.S. President Trump has been continuously pressuring the new Federal Reserve Chair to cut interest rates quickly. However, Wall Street investors are increasingly betting on the opposite outcome. The recent escalation of Iran conflict, implementation of new global tariffs, continued boom in data center investments, and strong U.S. consumer spending have exacerbated market and Fed concerns about inflationary pressures. This has reinforced expectations for maintaining current policy tightening or even further interest rate hikes.

The market generally expects the Fed to keep interest rates unchanged at the meeting on Wednesday. However, whether Chair Powell, who took office at the end of May, can continue to suppress the internal calls for rate hikes within the committee increasingly depends on whether inflation can continue to improve. Current polls show that the American public is not satisfied with Trump's economic performance, and higher interest rates will undoubtedly further dampen the economic performance the White House hopes to see.

Trump has been calling for rate cuts, reiterating this stance again this week. However, even if the Fed ultimately chooses to raise rates, Trump's initial criticism may not be directed at Powell, but more likely at other Fed officials. Trump has currently appointed three members of the seven-member Fed Board of Governors.

Trump previously stated: "Kevin is excellent, but he also has a committee, and the members of the committee are very politicized. He wants to do the right thing, I know what he wants to do, but he still needs to get the approval of some perhaps sinister people. Rates should come down."