The Federal Open Market Committee of the Federal Reserve began two days of meetings Tuesday, with the group expected to approve lowering interest rates.
This week's gathering comes as a court rejected President Donald Trump's bid to remove Commissioner Lisa Cook from the board after he accused her of committing mortgage fraud. The meetings also follow the Senate’s confirmation of former Trump administration economic adviser Stephen Miran to the board.
Trump has openly criticized the Federal Reserve for not lowering interest rates in 2025, while Chairman Jerome Powell has expressed concern over elevated inflation. Powell, however, has pointed to a softening job market as a reason the Fed may vote to cut rates. He has noted that lowering interest rates can help fuel job growth, though it can also lead to higher inflation.
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After the annual inflation rate surged to 9% in 2022, the Fed implemented its highest federal interest rate in two decades. The central bank was able to do so with unemployment remaining low and job creation robust.
But recent reports suggest hiring in the U.S. economy is slowing while inflation remains above the Fed’s 2% target.
Complicating matters, Powell suggested last month that inflation could rise as new tariffs on imported goods are imposed. However, with weaker job numbers, he said “the balance of risks appears to be shifting” between employment and price stability.
Powell alone does not have the power to raise or lower interest rates. At the Fed’s last meeting in late July — when members voted to keep rates steady — two members dissented, marking the first time in 30 years that two opposing votes were cast on the same decision.
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