As the Fed prepares to meet this week, a new policy standoff is unfolding. President Trump is pressing hard for preemptive rate cuts ahead of any slowdown his own tariffs may trigger. Meanwhile, Chair Powell is urging patience, citing sticky inflation and economic uncertainty.

• US GDP shrank for the first time in 3 years, partly due to a pre-tariff import rush

• April jobs data showed surprising resilience

• Inflation is still running above the Fed’s 2% target

• Trump has publicly called Powell “Mr. Too Late,” demanding rate cuts

• Some economists expect 125 bps in cuts by year-end if growth slows further

Fed’s Dilemma:

Hold rates to contain inflation expectations? Or ease policy to support a softening economy and labor market?

What’s Next?

The Fed is in a no-win situation — cut too early and risk fueling inflation, wait too long and risk recession. With political pressure rising, Powell’s next moves could define his legacy.