Namely, President Trump has pushed for Powell and the members of the Federal Open Market Committee (FOMC) to slash the base rate—or to have held it steady while President Biden was still in power.

The FOMC did neither of these things, and is increasingly unlikely to capitulate to pressure out of the White House, particularly because of the policies President Trump is announcing.

Trump’s so-called Liberation Day of April 2 has been a date when many analysts finally expect some answers to the questions they have about further tariffs: Namely, will Trump deliver on the threats he has been making over the past year or so?

But Tom Barkin, president of the Richmond Fed, said April 2 could simply mark the beginning of a new cycle of uncertainty. He explained to CNBC’s Closing Bell: “It’s going to take a while before people know what rates are going to be imposed on what countries and what products. For what, for how long, with what kind of retaliation.

“And then importantly how do countries and businesses and consumers respond? So my base case is it’ll take a while to get clarity here.”

This caution is likely the opposite of what President Trump wants to hear, having demanded that interest rates come down. Now, however, instead of the FOMC continuing on the course of normalization previously expected throughout 2025, it is holding fire until it has further information about the ripple effects of tariffs.

A key Trump ally, DOGE boss Elon Musk, stoked the criticism against the Fed this weekend, saying it’s time to “end” America’s central bank.

President Barkin has previously pointed out that in the years since the pandemic, businesses have clawed back some of their pricing power instead of squeezing margins in order to stay competitive.

This became particularly clear in 2022, he outlined, when prices were pushed up by supply-side issues but could be absorbed by consumers who were boosted by government fiscal stimulus.

In 2025 that money has dried up, and consumers don’t have the will to take further inflation on the chin, he explained: “The suppliers I talk to are emboldened. They’re saying very explicitly they’re going to have to take it on: ‘We’re going to have to pass those prices on.’

“The consumers are exhausted and frustrated—and tired of paying high prices. Think of it as a cage match between a very strong, immovable force and an irresistible object.”

He continued: “I’m not as convinced that people are going to be passing the tariffs on. I’m also not as convinced that there’s not going to be inflation.”

Rate cuts only come with confidence

If the White House wants to see the base rate continue to fall from its current benchmark of 4.25% to 4.5%, Powell and his peers will need evidence to give them some faith in the course of the economy.

When the FOMC met in January tariffs were already front of mind—even before the economic sanctions on the likes of Mexico and Canada were introduced, and before universal tariffs on industries like auto and steel were confirmed.

The notes released following the meeting earlier in the year read: “Participants generally pointed to upside risks to the inflation outlook.

“A couple of participants remarked that, in the period ahead, it might be especially difficult to distinguish between relatively persistent changes in inflation and more temporary changes that might be associated with the introduction of new government policies.”

A nonvoting member on the FOMC this year, Barkin added he would need to have greater confidence in the course of the economy before advocating for any cuts.

“You’d have to get confidence that inflation is settling,” Barkin added. “You could get that confidence because it actually continues to settle; you could get that confidence because the economy is in such tough shape that you feel that…whatever downturn you have will also settle inflation.

“Or I guess you could believe that these are just going to be one-time, one-month, two-month events and you’re on the back side.”