President Donald Trump is reportedly considering firing Federal Reserve Chairman Jerome Powell for refusing to cut interest rates—a move Trump believes is necessary to boost construction, consumption, and job creation. But with lingering pandemic-era inflation and uncertainty over tariffs, Powell and the Fed fear that more cuts would only fuel inflation.
Even if Powell—or a Trump-appointed successor—wanted to lower rates, the market might not allow it. The U.S. borrows too much, and the bond market is getting picky.
Interest rates remain elevated by recent historical standards. The Federal Funds Rate, the short-term rate set by the Fed, is currently 4.25 percent to 4.50 percent, while the 10-year Treasury yield hovers around 4.31 percent.
