Donald Trump Finally Bullied Jerome Powell Into Cutting Interest Rates

Donald Trump is getting the interest-rate cut he’s wanted.

The Federal Reserve announced Wednesday that it would cut rates by a quarter of a percentage point, its first cut in 2025—a move that came after months of intense pressure from the president and amid worrying signs about the state of the economy.

In a statement, the Federal Reserve board noted that “growth of economic activity moderated in the first half of the year. Job gains have slowed, and the unemployment rate has edged up.” The Fed meeting, chaired by Jerome Powell, included Fed governors Lisa Cook, whom Trump has been trying to fire, and Stephen Miran, a top Trump economic adviser who was just confirmed to serve on the Fed board earlier this week. At a press conference, Powell addressed a question about whether Miran’s addition to the board might compromise the Fed, saying, “We’re strongly committed to maintaining our independence.”

Trump has been highly critical of Powell, blasting him as “incompetent” on Sunday, days before Fed officials convened this week, and suggesting in a social media post on Monday that the anticipated rate cut was “too late” and would not be deep enough. He has publicly toyed with the idea of firing Powell, alarming critics of his efforts to influence the independent body. “I’m very concerned,” Democratic senator Elizabeth Warren told me over the summer.

The president has stopped short of trying to oust Powell. But he has been attempting to fire Cook, a Fed governor whom he and his allies have accused of mortgage fraud. (Cook has denied any wrongdoing.) A New York Times report published over the weekend cast serious doubt on allegations that she claimed homes in both Michigan and Georgia as her primary residence, and a judge temporarily blocked her removal last Tuesday, ruling that the president, according to the law, lacked sufficient cause. On Monday, the eve of the Fed’s two-day policy meeting, an appeals court also decided in Cook’s favor, allowing her to remain in her post.

That same day, the Senate confirmed the appointment of Miran, a Fed critic, to the board of governors. That set the stage for an extraordinary Fed meeting, one in which policy decisions were set against the backdrop of the president’s efforts to mold the central bank to his liking.

The Fed decision isn’t surprising; in a speech last month, Powell said that the “baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.” Somewhat ironically, the final nudge that led Trump to get the rate cut he wanted may have been some economic news he didn’t like: the bruising job report released last week, which revised estimated job-growth gains, sharing that more than 900,000 fewer jobs had been added for the year ending in March 2025. Much of the time span covered in the report took place before Trump returned to office. But the numbers hardly suggested that the economy was “booming,” as Trump had previously claimed.