U.S. President Donald Trump’s long-running feud with Federal Reserve Chair Jerome Powell took center stage this week as the central bank delivered a much-anticipated interest rate cut, even as a government shutdown left policymakers with only a partial view of the nation’s economic health. The move, which came on October 28, 2025, marked the second consecutive month of rate reductions, offering Trump a political win but raising new questions about the effectiveness of monetary policy during a period of economic uncertainty.
Speaking at the APEC CEO Summit in Gyeongju, South Korea, on October 29, Trump didn’t hold back. He labeled Powell “Jerome 'Too Late' Powell”—a jab that drew laughter from the crowd of corporate executives and business leaders. Trump’s frustration with the Federal Reserve has been a recurring theme throughout both of his presidencies, but this latest volley came just as the Fed finally moved to lower rates by 25 basis points. According to Devdiscourse, Trump argued that the Fed’s hesitance to cut rates sooner had dampened business sentiment, especially as European central banks had already forged ahead with their own rate reductions.
“We’re not going to have a Fed that’s going to raise interest rates because they’re worried about inflation in three years from now,” Trump declared in his speech to Asian business leaders, as reported by MSNBC. The president’s confidence in a 4% expansion of the U.S. economy in early 2026 was clear, and he took the opportunity to highlight investment commitments from global giants like TSMC Global and SoftBank. Trump is actively seeking partnerships in shipbuilding with South Korea and Japan, aiming to boost economic growth through international collaboration.
The Federal Reserve’s decision to cut rates comes at a precarious time. A month-long government shutdown has delayed the release of key economic data, leaving Powell and his colleagues to make policy decisions with limited information. As Reuters noted, economists have likened the Fed’s predicament to “driving with a cracked windshield,” as official readings on the health of the economy remain elusive. The Labor Department, for example, has yet to release its official monthly jobs report, though forecasters expect the downward trend in employment to continue.
Indeed, the economic backdrop is far from rosy. In August, unemployment rose to 4.3%—the first increase since October 2021, according to government data cited by MSNBC. Major corporations, including Amazon, Target, United Parcel Service, Meta, and Rivian, announced significant layoffs in October, underscoring persistent weaknesses in the labor and housing markets. William Yu, an economist at the University of California, Los Angeles, described the Fed’s rate cut as “the right decision,” noting it was a response to real problems in the economy. Still, Yu and other analysts cautioned that the move is unlikely to deliver immediate relief.
Inflation remains stubbornly above the Fed’s 2% target, coming in at 3% as of October 22. The persistence of elevated prices has complicated Trump’s efforts to fulfill his campaign promise of lowering the cost of living for Americans. According to a recent Pew Research Center survey, 74% of Americans rate economic conditions as only “fair” or “poor,” with more than half of Republicans and 90% of Democrats sharing that view.
The political drama surrounding the Federal Reserve has only intensified as Trump openly searches for Powell’s replacement. Powell’s term as chair expires in May 2026, and Trump has repeatedly threatened to fire him—though such a move would be highly unusual given the Fed’s status as an independent agency. In September, Trump appointed his former chief economist, Stephen Miran, to the Federal Reserve Board. Miran’s views diverge sharply from his colleagues, as he advocates for even larger rate cuts.
“I think it’s the world’s easiest job, but to get it right, you have to be very smart, and we have a person that’s not at all smart right now,” Trump told reporters aboard Air Force One on October 27, doubling down on his criticism of Powell. The president has made it clear he wants “the lowest interest rates of any country,” arguing that the U.S. economy deserves nothing less.
The central bank’s latest move, however, may not be the panacea Trump hopes for. Josh Bivens, chief economist at the Economic Policy Institute, told MSNBC that the rate cut “will not be any kind of game changer in the near term.” Bivens and others argue that factors beyond monetary policy—such as tariffs and supply shocks—are driving both inflation and unemployment. In fact, five Senate Republicans recently voted to block Trump’s proposed tariffs on Brazil, a rare rebuke from within his own party. Jai Kedia, a macroeconomist at the Cato Institute, pointed to “the highest tariff rates we’ve had in several decades” as a key reason for the current “poor economic cycle.”
Trump’s trade policies have been front and center in recent negotiations with China. On October 29, he announced an agreement to reduce tariffs on China to 47% in exchange for Beijing resuming U.S. soybean purchases, maintaining rare earths exports, and cracking down on illicit fentanyl trade, as reported by Reuters. While the move could ease some trade tensions, it remains to be seen how much relief it will provide to American consumers and businesses.
Meanwhile, the Federal Reserve’s ability to steer the economy is hampered by the ongoing government shutdown. Without reliable economic data, the central bank is forced to rely on incomplete information—a situation that has left businesses, families, investors, and markets “flying blind,” according to White House spokesperson Kush Desai. The data blackout has also delayed key government economic releases, further complicating the Fed’s task as it heads into its next meeting in December.
Looking ahead, Powell has cautioned against expecting another rate cut in December, signaling a wait-and-see approach as the central bank navigates a challenging landscape. For now, Trump’s wish for lower borrowing costs has been granted, but the road to sustained economic growth remains uncertain. As economists and policymakers grapple with inflation, unemployment, and geopolitical tensions, the Fed’s next moves will be watched closely—not just by the White House, but by the world.
In an era marked by political drama and economic headwinds, the interplay between the White House and the Federal Reserve continues to shape the fortunes of American households and businesses alike. Whether the latest rate cut will prove to be a turning point or just another chapter in a long-running saga remains to be seen.
