Trump’s comments on this Federal Reserve decision are completely different from how he used to attack Powell. This time, he is quite calm—so calm, you could even say, he’s composed.

## Regarding “not minding keeping interest rates unchanged”

When asked what he thinks about the Federal Reserve maintaining interest rates unchanged, Trump—who is attending the G7 summit in France—responded: “No problem. Whatever.”

These words coming out of his mouth are quite unusual. After all, he previously called Powell “an idiot” and “a wooden head.” His appointment of Waller was made specifically for rate cuts; he even joked that he would sue him if rates weren’t cut.

The reason his stance has softened this time is simple—he gave Waller face, saying, “Over on our side, we’ve got a very good person now, so I’ll go along with what he wants.” And he also acknowledged that dragging the war with Iran on could pull the United States into an economic catastrophe, even a depression. In such a situation, the Fed really does have a hard time dealing with it.

## Regarding “not ruling out the possibility of a rate hike”

When asked about the possibility of a rate hike, Trump said: “It could happen. Hard to believe. It would only make the country sluggish—this is just… too… unusual.”

He didn’t directly reject it or blow up the way he used to. He even hinted that if inflation gets out of control, a rate hike might be necessary. However, he also emphasized that monetary policy needs to strike a balance between controlling inflation and supporting economic growth.

Behind this restraint is real pressure—9 Federal Reserve officials now support raising rates by the end of the year, with 6 of them supporting two or more rate hikes. Inflation has already exceeded 4%, and the market has priced in a 72% probability of a rate hike in October. Waller, whom Trump personally elevated, cut the forward guidance in the first meeting and refused to submit dot plots—backing it up with actions to tell the market that the Fed doesn’t owe the White House anything.

Put simply, this time Trump chose not to take on the Fed head-on. It’s not that he doesn’t want rate cuts—Waller’s actions have drawn the line, and Trump has given Waller enough trust and room. The possibility of a rate hike does exist, but Trump has already rounded out his remarks—“I’m guided by him.”
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