Is Jerome Powell’s Rate Freeze a Political Move Against Trump’s Economic Agenda?

the staff of the Ridgewood blog

Wall Street NY, in the high-stakes world of U.S. monetary policy, Federal Reserve Chair Jerome Powell has built a reputation as a cautious decision-maker—balancing the twin mandates of controlling inflation and supporting employment. But as President Donald Trump’s economic vision—fueled by aggressive tariffs and growth-oriented policies—advances, Powell’s refusal to cut interest rates is sparking fresh speculation: Is this really about economics, or is politics creeping into the Fed’s decisions?

A Pattern of Inconsistency

Powell has defended his decision to keep rates at 4.25%–4.5%, warning about “tariff-driven inflation” just around the corner. Yet the stance raises eyebrows when compared to his actions before the 2024 election.

In October 2024, when inflation was at 2.6% and job growth was stagnant (+12,000 jobs), Powell and the Fed cut rates three times, citing cooling inflation. Now, with inflation barely higher at 2.7% but the labor market clearly weakening, Powell is hitting the brakes on rate cuts—arguing that tariff-related inflation remains a threat.

If inflation was “manageable” enough to warrant cuts before an election, why is a mere 0.1% difference now an “insurmountable” barrier?

Weak Labor Market Signals Trouble

The July 2025 jobs report showed just 73,000 jobs added—well below the expected 100,000—with unemployment at 4.3%. Hiring is slowing across multiple sectors, and Powell’s high-rate stance risks further damage to an already fragile labor market. Critics say prioritizing speculative inflation over real job losses is an imbalance that contradicts the Fed’s mission.

Political Context Can’t Be Ignored

This isn’t happening in a vacuum. Revelations from Tulsi Gabbard on the origins of the Russiagate controversy—highlighting how officials like former CIA Director John Brennan used their positions to undermine Trump—fuel suspicion that political motivations may be influencing institutional decisions.

Given this history, questioning Powell’s motives isn’t conspiracy—it’s due diligence.

Cracks in the Fed’s Unity

For the first time since 1993, two Fed governors—Christopher Waller and Michelle Bowman—formally dissented at the July meeting, pushing for a quarter-point rate cut. Meanwhile, the surprise resignation of Adriana Kugler in August 2025 hints at deeper internal divisions.

Wall Street is also losing patience. CNBC’s Jim Cramer warned, “The Fed is behind the curve,” urging immediate cuts to prevent further economic slowdown.

The Big Question

With inflation stable, unemployment creeping up, dissent within the Fed, and mounting pressure from market experts, Powell’s resistance to rate cuts looks less like economic caution and more like selective timing that aligns with political cycles.

The precedent is there, the data is there, and the history is there—making it fair to ask:
Is Powell’s monetary policy truly about protecting the economy, or is it about stopping Trump?

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