Ahead of this week's Federal Reserve meeting, the White House pressures to "significantly lower interest rates"

Before the key meeting of the Federal Reserve, the interest rate dispute between the White House and the Federal Reserve has intensified again. On Sunday, the White House exerted greater pressure on Federal Reserve Chairman Jerome Powell, demanding a "significant reduction" in interest rates to create momentum for the upcoming interest rate decision-making committee meeting. According to the Financial Times, White House budget director Russell Vought criticized Powell for lowering interest rates "too late" and slammed the Federal Reserve's $2.5 billion renovation project as a "luxurious monstrosity." Vought stated that Trump believes interest rates should be "significantly lower than the current level." He said: In many ways, we believe Chairman Powell has acted too late. We... must clearly express the views of the American people and the President that interest rates need to be lowered, and that this "luxurious monstrosity" should not appear on the National Mall. The Federal Open Market Committee (FOMC) of the Federal Reserve will announce its July interest rate decision at 12:00 AM Beijing time on Thursday, with the market widely expecting the central bank to keep rates unchanged. This decision could bring the already tense relationship between the White House and the Federal Reserve to a new low, as Trump is pushing to lower rates from the current 4.25%-4.5% to just 1%. U.S. Secretary of Commerce Wilbur Ross also stated on Sunday that it is "meaningless" for the Federal Reserve to maintain the current interest rate level, adding momentum to the White House's pressure. Trump's Rare Visit to the Federal Reserve Headquarters Last week, Trump took the highly unusual step of personally visiting the Federal Reserve to inspect the $2.5 billion renovation project at the Federal Reserve headquarters. On Friday, Trump stated that he had a "very good conversation about interest rates" with the Federal Reserve Chairman. He believes Powell's comments about the U.S. economy "performing very well" imply that Powell will "suggest lowering interest rates" to other FOMC members. This unprecedented visit highlights Trump's intention for direct intervention in Federal Reserve policy. Trump's repeated criticism of the Federal Reserve and threats to dismiss Powell have raised concerns on Wall Street about the erosion of the Federal Reserve's independence. Divisions Within the Federal Reserve Most members of the FOMC have indicated that they want to observe the inflation impact of Trump's tariffs on U.S. trading partners before deciding whether to cut rates. After a total of 100 basis points cut last year, U.S. interest rates have remained unchanged since early 2025, primarily due to concerns that trade conflicts will hinder the return of inflation to the Federal Reserve's 2% target. However, there are divisions among FOMC members regarding the pace of rate cuts. Governors Waller and Bowman—both appointees of Trump during his first term, like Powell—may support a 25 basis point cut as early as Wednesday. Waller stated this month that tariffs will prove to be a "one-time shock" and will not permanently raise inflation