Today is a monster day for U.S. economic politics.
At 8:30 a.m., the Bureau of Economic Analysis — part of the Commerce Department — will release the “advance” second quarter GDP estimate. The U.S. economy shrunk during the first quarter of 2025. But experts believe that the new data will show growth of between 1.7% to 2.4% in the second quarter, despite fears over inflation and trade wars.
And at 2 p.m., the Federal Open Market Committee will announce whether it intends to cut interest rates. Federal Reserve Chair Jay Powell will then hold a press conference at 2:30 p.m. to talk about his views on the state of the economy.
As you know by now — unless you’re literally living under a rock — President Donald Trump has a particular interest in the Fed cutting rates. Trump openly pressured Powell last week during his visit to the Fed’s headquarters, nominally a presidential check on the state of the Fed’s “lavish” renovation project and alleged massive cost overruns (it also spawned hundreds of great new memes!)
Trump basically told reporters that Powell’s problems would all disappear if he simply cut interest rates. “Well, I’d love him to lower interest rates,” Trump said when asked what it would take to back off “earlier criticism” of Powell. “Other than that, what can I tell you?”
Yet the president may not get what he wants, according to market watchers, who expect the Fed to leave rates unchanged for now but signal a possible cut in September. That means Washington, Wall Street and global financial markets are waiting to see what Trump does next.
Looking ahead. There’s little sense that Trump will actually try to fire Powell if the Fed doesn’t cut rates. Trump’s closest allies on Capitol Hill would be fine with it if he did, although there would be huge legal, political and economic fallout.
“My suspicion is he won’t make an interest-rate cut,” said Sen. Bernie Moreno (R-Ohio), who views Powell as a “complete partisan hack.”
“[Powell] has an ego the size of the universe,” Moreno added. “This guy has way too much power in his head.”
There’s also a number of Republicans who don’t want Trump to move against Powell, even though they don’t like the Fed chair either and would love to see him depart sooner rather than later.
“I think there’s a lot of downside to firing him,” said Sen. Roger Marshall (R-Kan.). “I’d rather [Powell] resign because we have no confidence in him. To me, the American people have no confidence in him.”
However, the majority of Republicans are still defending the Fed’s independence, even if that doesn’t line up with Trump’s views.
“Having an independent central bank is very important, and I hope that we continue to have an independent central bank,” Sen. Todd Young (R-Ind.) said.
Here’s Sen. John Kennedy (R-La.): “The Federal Open Market Committee should do what it thinks is right and forget the political pressure.”
Dems’ POV. Democrats are loudly demanding that Trump leave Powell alone. Even Sen. Elizabeth Warren (D-Mass.), a frequent critic who twice voted against Powell — his original nomination by Trump as Fed chair in 2017 and former President Joe Biden’s decision to tap him for a second term in 2021 — defends the Fed chair’s independence.
“I want to see interest rates go down, but there’s exactly one person who is responsible for keeping interest rates high and that’s Donald Trump,” Warren told us, pointing to the “chaos” of Trump’s numerous tariff moves.
“I’ve never been a Powell fan … but I believe in the independence of the Fed,” Warren said.
