Former President Donald Trump has turned up the heat on Federal Reserve Chair Jerome Powell, openly criticizing him after the central bank decided to leave interest rates unchanged. Trump, who has long pushed for lower rates, argued that Powell’s cautious approach is hindering economic growth at a time when the economy is navigating considerable uncertainty.

The Fed has kept its benchmark interest rate between 4.25% and 4.5% since December 2024, aiming to control inflation that has threatened to reignite amid new trade tariffs and policy shifts. Trump, however, sees this stance as unnecessarily restrictive. Throughout his presidency, he has publicly urged Powell to cut rates, insisting it would fuel growth and provide much-needed relief for consumers and businesses. Despite the pressure, Powell has maintained that the economy does not require immediate rate cuts, citing solid growth and the need to remain vigilant against potential inflation flare-ups.

Inside the Federal Reserve, there is some dissent. Notably, board member Christopher Waller, one of Trump’s appointees and a contender to potentially replace Powell, has expressed a different perspective. Waller points to signs of a weakening labor market and slower economic growth as justification for rate cuts. He believes that Trump’s new tariffs are unlikely to cause a surge in inflation and that the Fed can afford to ease up to support the economy.

Meanwhile, the broader economic picture remains mixed. Growth hit an annualized rate of 3% in the second quarter, thanks to strong consumer spending and a drop in imports, even as higher rates and tariffs loom large. The stand-off between Trump and Powell reveals deep divisions about the best path forward for U.S. monetary policy at a volatile economic moment, with future Fed actions under close scrutiny.