Fed expected to hold rates and trigger standoff with Trump
The Federal Reserve is expected to leave interest rates on hold Wednesday, despite mounting pressure from President Donald Trump—setting up a direct standoff between the world’s most influential central bank and a White House demanding immediate stimulus.
This is the warning from Nigel Green, CEO of global financial advisory giant deVere Group ahead of the Fed’s critical interest rate decision that will set the tone for markets and the US economy for the rest of 2025.
He says: “Trump has made no secret of his frustration. Senior administration figures have been pressing the Fed behind the scenes, while the President has repeatedly gone public with calls for lower borrowing costs.
“But the central bank appears likely to resist, at least for now, holding firm in the face of aggressive political intervention.
“In doing so, it could trigger another direct standoff with Trump.
Nigel Green continues: “This is a collision between a political push for immediate stimulus and a central bank trying to defend its institutional independence. The stakes go far beyond this week’s rate decision.”
Markets are already attuned to the tension. A rate hold is largely priced in. But investors are watching for what comes next: the tone of Powell’s message, and Trump’s reaction if the Fed refuses to deliver the cuts he’s demanding.
“The pressure campaign is about to intensify,” the deVere CEO notes.
“Trump blames the Fed for slowing the economy, for capping the market, for anything that doesn’t go his way. This will, again, become personal with Fed Chair, Jerome Powell.”
The economic backdrop gives the Fed cover to pause. Inflation has cooled but remains above target. Labor markets are still tight. Financial conditions are already easier than they were at the start of the year. There is no immediate economic case for cutting—but there is a clear political one.
“This is about optics as much as outcomes,” says Nigel Green. “The White House wants momentum. The Fed wants breathing room. Neither side is likely to back down.”
What happens next matters. If Trump launches a fresh public offensive—as expected—it could shift sentiment quickly.
“The dollar could strengthen on Fed firmness, while equities and emerging markets wobble on fears of a widening institutional rift.”
He adds: “Markets can handle steady rates. What they don’t handle well is institutional volatility. A public fight between the President and the Fed injects uncertainty into every asset class.”
The President has options. If monetary easing doesn’t come through, he may accelerate fiscal promises, hint at further executive action, or reignite questions over Jerome Powell’s future.
This administration has already shown it’s willing to blur lines between economic stewardship and political advantage.
“Trump wants control of the economic narrative and he’s running out of patience,” concludes Nigel Green.
“If the Fed doesn’t move, he’ll move the spotlight. This could mean spending pledges, it could mean trade posturing, it could mean fresh attacks on Powell. All of it adds risk.”