Federal Reserve Chairman Jerome Powell defended the nonpartisan independence of the Fed during an Oval Office meeting with President Donald Trump on Thursday, even as the president said the Fed chair is “making a mistake” by not lowering interest rates.
Though the exact scope of the meeting is unknown at this time, the pair discussed economic issues, including employment and inflation matters that the central bank’s Federal Open Market Committee (FOMC) considers when determining the direction of U.S. monetary policy, according to a statement released by the Fed.
“At the President’s invitation, Chair Powell met with the President today at the White House to discuss economic developments including for growth, employment and inflation,” the Fed statement read. “Chair Powell did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook.”
The Fed statement added that Powell stressed to the president that the Fed is an independent body that isn’t swayed by political forces.
“Chair Powell said that he and his colleagues on the FOMC will set monetary policy, as required by law, to support maximum employment and stable prices and will make those decisions based solely on careful, objective and non-political analysis,” the statement concluded.
White House Press Secretary Karoline Leavitt said during a Thursday press conference primarily focused on a recent court ruling blocking the Trump administration’s tariff policies that she and Trump agreed that the contents of the Fed statement were accurate. But she added that Trump made his views on interest rates clear during the meeting with Powell.
“The president did say that he believes the Fed chair is making a mistake by not lowering interest rates, which is putting us at an economic disadvantage to China and other countries,” Leavitt said. “And the president’s been very vocal about that, both publicly and now I can reveal privately as well.”
The sit-down marked the first time Powell has met with Trump during his second presidential term. He was nominated to serve as Fed chair by Trump in 2017 and met with him twice in 2019. President Joe Biden tapped Powell for a second term as central bank chief in 2021, and they met in the Oval Office in 2022.
Trump has been critical of the Fed’s policy decisions in 2025 and has attacked Powell personally in interviews and on social media. Trump’s displeasure with the Fed’s wait-and-see approach on interest rate cuts came to a head on April 17 when he threatened to fire Powell. He later backtracked from that threat but continued to chastise Powell on social media, labeling him “Mr. Too Late” and a “major loser.”
Leavitt said during the press briefing that Trump and Powell did not discuss whether the president would allow Powell to serve out his term as Fed chair or if he plans to replace Powell when his chairmanship term ends in May 2026.
Fed minutes released, highlighting stagflation risks
The day before Powell’s visit to the West Wing, the Fed released the minutes from the FOMC’s latest monetary policy meeting that concluded on May 7. As was widely anticipated, the Fed left the benchmark federal funds rate unchanged at that meeting at its current range of 4.25% to 4.5%.
The scope of the minutes largely mirrors public comments Powell made in his post-meeting press conference, when he said the Trump administration’s unveiling in April of sweeping tariffs on imported goods caused significant economic uncertainty and made it difficult to assess the impacts of tariffs on inflation and unemployment.
But the minutes also reveal that the general sentiment among FOMC members reflected deeper concerns about the potential for stagflation, which is a combination of stagnant economic growth, high inflation and elevated unemployment.
Though the dreaded S-word does not appear in the Fed meeting minutes, stagflation risks were clearly on the minds of FOMC members.
“Overall, [meeting] participants judged that downside risks to employment and economic activity and upside risks to inflation had risen, primarily reflecting the potential effects of tariff increases,” the minutes read.
Stagflation is often viewed as a worst-case scenario for central banks. If the Fed were to cut interest rates during a period of rising inflation, it would risk further inflating prices. On the other hand, if the Fed raises rates during a period of slowing economic activity, it could exacerbate the problem and lead to a rise in unemployment.
Compared to the FOMC’s March meeting, the May minutes show the Fed projecting weaker gross domestic product in 2025 and 2026, with U.S. trade policies weighing down economic growth. Additionally, the Fed’s May unemployment outlook called for higher unemployment in 2025 persisting through 2027, and its inflation projections for 2025 and 2026 were higher than the forecasts prepared at the March meeting.
The next FOMC meeting commences June 17 in the boardroom at the Eccles Building in Washington, D.C., a brief 20-minute stroll from Powell’s latest high-profile meeting at 1600 Pennsylvania Avenue.
