The Fed's Interest Rates Behind the Donald Trump-Jerome Powell Conflict

Adi Ahdiat 13/01/2026 11:09 WIB

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According to Fed Chairman Jerome Powell, U.S. President Donald Trump pressured the central bank to lower the benchmark interest rate.

The Fed Interest Rate (January 2016-December 2025)

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The Fed Interest Rate (January 2016-December 2025)

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In early January 2026, Federal Reserve Chairman, or Fed Chairman, Jerome Powell, received a summons from a United States (US) court with the threat of criminal charges related to a building renovation project.

However, according to Powell, this criminal threat is a form of pressure from US President Donald Trump, to make the Fed, as the central bank, lower its benchmark interest rate.

"Those are pretexts. The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President," Powell said in a press release (January 11, 2026).

Previously, Trump had repeatedly asked the Fed to lower interest rates. This was one of the things Trump expressed late last year.

"I want my new Fed Chairman to lower interest rates if the market is doing well. Anybody that disagrees with me will never be the Fed Chairman," Trump said, as reported by The Wall Street Journal (December 23, 2025).

Since Trump returned to the US presidency, the Fed has lowered interest rates by 0.75 percentage points, from a range of 4.25—4.5% in January 2025, to 3.5—3.75% in December 2025.

Despite the reduction, the figures are still higher than during Trump's presidency from 2017—2020, when Fed interest rates fluctuated between a low of 0.25% and a high of 2.5%.

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."