Jerome Powell, the Chair of the Federal Reserve, is facing unprecedented accountability as he steers the Fed through a murky, perplexing economic picture. His term expires May 2026. He’s under tremendous and maybe unprecedented pressure from all directions, not the least of which is coming from President Donald Trump, who has repeatedly blasted Powell’s leadership and monetary policies. As inflationary pressures re-emerge and economic growth shows signs of slowing, many are questioning the future direction of the Federal Reserve.
During a recent tour of the Federal Reserve Board building on July 24, 2025, Powell and Trump discussed the state of the economy amidst rising inflation rates. Considering what is at stake, this meeting could not have come at a better time. By July, core inflation was up for three consecutive months, raising concerns about the efficacy of the prevailing monetary policy stance. Inflation remains well under the Fed’s 2% target rate. At the same time, it is less than a percentage point higher, an indication that the storm clouds may be forming.
Today, the Federal Reserve is targeting the federal funds rate between 4.25% and 4.5%. The people who put their money on those things think a quarter-point interest rate cut is almost certain before long. CME FedWatch Tool The CME FedWatch Tool has a stunning 96% probability of this happening when central bankers gather in Jackson Hole next month. Some analysts speculate that this anticipated rate cut may be influenced by Trump’s repeated calls for lower interest rates, further complicating Powell’s position.
Powell has repeatedly pushed back on the idea that politics has played any role in the Fed’s policy-making. He stated, “I have the ability to make these very challenging decisions in ways that are focused on the data, the evolving outlook, the balance of risks – and not on political factors.” In response, critics have taken to calling him Jerome “Too Late” Powell. Even worse, they are convinced that he has been hesitant to acknowledge and respond to shifting economic conditions.
Attack from Trump has crystalized as inflation for a $2.5 billion expansion project at the central bank keep rising. Those increasing costs have only stoked his anger. The former president has publicly condemned Powell, stating, “Jerome ‘Too Late’ Powell must NOW lower the rate,” and adding that “the damage he has done by always being Too Late is incalculable.”
The economic indicators paint a mixed picture. Over the three months prior to July this annual rate translates to employers adding a net of 35,000 new jobs on average per month. Other authorities warn that the new numbers reflect an overall logical deceleration of the economy. Gerald Epstein, an economist, remarked, “These job statistics show there’s been a slowdown in the economy,” indicating that while job growth exists, it may not be sufficient to sustain overall economic momentum.
Fedyk, another economic analyst, pointed out that while inflation has risen recently, it is “just coupled with a relatively worsening labor market.” This sentiment underscores the tightrope on which Powell will need to walk. He has to consider the negative impacts of a future rate cut.
