The Federal Reserve opted to keep interest rates steady last week, drawing ire from the president and administration officials — but this week, more central bankers appear to be on the same page as Donald Trump.
Trump, who had repeatedly called for interest rate cuts, took to Truth Social to air his displeasure with the Fed’s decision.
“We will be paying for his incompetence for many years to come,” he stated, adding that he believes rates should be “at least two to three points lower.” Vice President JD Vance has also joined the debate, accusing the Fed of “monetary malpractice” by not cutting.
Powell appeared before Congress for testimony on Tuesday, defending the Fed’s cautious approach.
“The FOMC’s obligation is to keep longer-term inflation expectations well anchored and to prevent a one-time increase in the price level from becoming an ongoing inflation problem. As we act to meet that obligation, we will balance our maximum-employment and price-stability mandates.”
As Trump clamors for cuts and Powell digs in, a handful of Fed officials have been sounding more dovish.
Here’s what three top central bankers are saying about the outlook for rates.
Fed Gov. Christopher Waller
Shortly after the Fed decision, Fed Gov. Christopher Waller said that he believed Powell should consider reducing interest rates next month.
He expressed a different view from Powell, stating that he doesn’t believe tariffs pose a substantial impact on inflation but highlighting the possibility of a labor market shutdown.
“I’m all in favor of saying maybe we should start thinking about cutting the policy rate at the next meeting, because we don’t want to wait till the job market tanks before we start cutting the policy rate,” he added.
Polymarket shows that betting markets see Waller as the top candidate for the next Fed boss, at 31% odds. Others include Trump economic advisor Kevin Hassett, former Fed governor Kevin Warsh, and Treasury Secretary Scott Bessent.
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Fed Gov. Michelle Bowman
Michelle Bowman, Vice Chair for Supervision of the Board of Governors of the Federal Reserve System, echoed Waller in comments on Monday. stating that she would support cutting interest rates as soon as the July FOMC meeting.
Speculating that any inflationary impact of the Trump administration’s tariffs is likely to have minimal impact on the US economy, she said that “ongoing progress on trade and tariff negotiations has led to an economic environment that is now demonstrably less risky.”
Bowman said she believes that this means the central bank should consider adjusting interest rates, and highlighted “signs of fragility in the labour market.”
Chicago Fed President Austan Goolsbee
Chicago Fed President Austan Goolsbee recently addressed the possibility of reducing interest rates as well.
While he didn’t specify a timeline, he’s stated that if the tariffs do not lead to more inflation, he sees rate cuts resuming.
“If we do not see inflation resulting from these tariff increases, then, in my mind, we never left what I was calling the golden path,” he said, referring to the economic outlook before Trump’s April tariff announcement. “If the dirt is out of the air, then I think we should proceed.”
Goolsbee added that data in recent months has shown little impact from tariffs on inflation. He suggested the trend will continue, giving the Fed breathing room to loosen monetary policy.
