The Federal Reserve on Wednesday is set to announce its latest decision on the level of interest rates, marking its first rate move since news surfaced of a federal criminal investigation into Fed Chair Jerome Powell.The investigation ratcheted up an extraordinary clash between the nation's top central banker and the White House, which has urged the Fed to significantly reduce interest rates.The central bank is widely expected to hold interest rates steady on Wednesday.The anticipated move would end a string of three consecutive quarter-point rate cuts, aligning with a cautious approach outlined by Powell last month, before reports of the investigation into his conduct.Trump wants much lower interest rates.
Is that a good idea?"We're well positioned to wait and see how the economy evolves," Powell said at a press conference in Washington, D.C., on Dec.10.Futures markets expect two quarter-point interest rate cuts this year, forecasting the first in June and a second in the fall, according to CME FedWatch Tool, a measure of market sentiment.The federal probe appears to center on Powell's testimony to Congress last year about cost overruns in a multi-billion-dollar office renovation project.
Powell, who was appointed by Trump in 2017, issued a rare video message earlier this month rebuking the investigation as a politically motivated effort to influence the Fed's interest rate policy.In this Dec.10, 2025, file photo, Federal Reserve Chair Jerome Powell holds a press conference following a two-day meeting of the Federal Open Market Committee at the U.S.
Federal Reserve in Washington, D.C.Kevin Lamarque/Reuters, FILEThe investigation follows months of strident criticism leveled at the Fed by Trump.The president denied any involvement in the criminal investigation during a brief interview with NBC News hours after the Fed posted Powell's video.Over the past year, hiring has slowed dramatically while inflation has remained elevated, risking an economic double-whammy k...