Federal Reserve Chair Jerome Powell has been in regular communication with the White House despite former President Donald Trump’s past criticism.
The discussions focus on economic policies, inflation, and interest rates. White House officials have confirmed these meetings, emphasizing that they respect the Fed’s independence while ensuring the administration’s views are heard.
White House resumes direct talks with the fed
Kevin Hassett, Trump’s top economic adviser and director of the National Economic Council, confirmed the renewed talks between the White House and Powell. According to Hassett, the meetings are meant to facilitate an open exchange of economic perspectives while maintaining the central bank’s autonomy. He noted that Powell remains independent but acknowledged that the president’s stance on economic issues also matters.
Trump has openly criticized Powell in the past, particularly during the 2024 election campaign, where he suggested replacing him with someone more aligned with his policies. Powell, however, made it clear that any attempt to remove him unlawfully would lead to legal action. Despite past tensions, the renewed discussions suggest a working relationship between the administration and the Fed.
Inflation and interest rates remain key issues
Inflation remains a top concern for both Trump and Powell. The Consumer Price Index (CPI) has risen by 4.6% over the past three months, surpassing the Federal Reserve’s 2% target. Rising costs for food, fuel, and essential goods continue to put pressure on consumers. Egg prices have been particularly impacted, partly due to a bird flu outbreak that led to mass culling of chickens.
Hassett blamed the previous administration’s response to avian flu, arguing that it relied too heavily on culling rather than containment. The Trump administration is developing a new strategy focusing on biosecurity measures and medical solutions instead of large-scale poultry slaughter.
Trump has repeatedly pushed for lower interest rates, claiming they are burdening consumers. However, Powell has maintained that rates will remain high until inflation stabilizes. Hassett defended Trump’s position by pointing out that long-term Treasury yields have already dropped, signaling a potential shift in market expectations.
Trade policies and economic plans under review
The administration has returned its attention to trade policies because they plan to introduce new tariffs against countries which impose Value-Added Taxes (VATs). The Trump administration team asserts that U.S. businesses pay elevated tax costs to foreign governments than their foreign business rivals pay to the United States. The government works to solve the trade imbalance through negotiations with different countries.
Additionally, officials are working on a broader economic plan that includes tax cuts, deregulation, increased energy production, and spending reductions. The goal is to stimulate economic growth while managing inflationary pressures.
The White House continues dialogue with the Fed about economic policy which maintains its central position in the administration. Financial circumstances will be defined by the direction of interest rates along with inflation control efforts and trade policy changes throughout the next few months.