Vice President JD Vance is questioning Federal Reserve Chair Jerome Powell for delaying rate cuts, despite his admission to the House Financial Services Committee on Tuesday that inflation is declining. On Tuesday, Vance took to X to ask the Fed chair about pausing rate cuts, writing, “I’d love to hear an argument for why Powell cut rates 50 points right before an election but can’t do it now with inflation lower.” I’d love to hear an argument for why Powell cut rates 50 points right before an election but can’t do it now with inflation lower. — JD Vance (@JDVance) June 24, 2025 Powell is facing immense pressure from President Donald Trump, Republican lawmakers, and now the vice president himself. In a May interview with Fox News, Vance said he respected Powell individually, but argued that the Fed Chair has “been wrong about almost everything.” He accused Powell of acting too slowly during the Biden administration’s inflation surge and now, in his view, of failing to act decisively enough in supporting the Trump administration’s economic plans. Powell defends wait-and-see approach In his appearance before the House Financial Services Committee, Powell told policymakers that inflation may have eased, but “uncertain” economic conditions justify holding off on rate cuts. “ For the time being, we are well-positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance ,” Powell said during his testimony. Yet, the Fed chair admitted that it was unclear if the effects would be temporary or longer-lasting. “ The (Fed’s) obligation is to keep longer-term inflation expectations well anchored, ” Powell stated, “ and to prevent a one-time increase in the price level from becoming an ongoing inflation problem .” Republican lawmakers are frustrated with the central bank’s reluctance to act. Representative Bill Huizenga of Michigan pressed Powell to explain why the Fed has not joined other global central banks in cutting rates. “Why aren’t you doing what the rest of the world is doing?” Huizenga asked. Powell responded that, going by the current data, a case could be made for rate cuts. “ If you just look in the rear-view mirror, you could make a good argument ,” he reckoned. “ The reason we’re not is that forecasters do expect a meaningful increase in inflation (from tariffs) in the course of the year. ” Trump administration continues personal attacks on Federal Reserve hierarchy Conservatives, including Rep. Mike Lawler of New York, believe the inflation risks Powell has cited are largely hypothetical. Lawler argued that any price spike from tariffs or oil should be short-lived. “What is the reason not to cut rates?” he pressed. “It’s the uncertainty about the size and potential persistence of those price increases,” the central bank chair responded. President Trump, who appointed Powell during his first term, has made it clear on several occasions that he does not approve of the decisions the Fed Chair has been making. “ Well, the Bank of England cut, China cut, everybody’s cutting but him ,” Trump said in a press briefing back in May. “We’ll see what happens. It’s a shame. I call him ‘Too Late.’” The Fed’s preferred measure of inflation currently sits at 2.3%, only slightly above its 2% target. Powell noted that while the job growth rate is cooling, unemployment is at a low of 4.2%, adding that the overall economy is in “a solid position.” Wall Street is betting that rate cuts are only a matter of time. Morgan Stanley forecasts as many as seven rate reductions by 2026, bringing the benchmark rate down to a range of 2.5% to 2.75%. Prediction markets are also leaning toward cuts in the near term. According to Polymarket, there is an 84% probability that at least one rate cut will occur in 2025. The most likely scenario, with a 31% chance, is two cuts totaling 50 basis points. KEY Difference Wire : the secret tool crypto projects use to get guaranteed media coverage
