• Jerome Powell has privately assured allies he will not resign despite Trump's demands.
  • The Fed's key interest rate remains steady at 4.25%–4.50% amid persistent inflation concerns.
  • Political tensions escalate as Trump expands criticism to include Fed headquarters renovation.

Powell Digs In as Political Storm Rages

Federal Reserve Chair Jerome Powell has told multiple associates he has no intention of stepping down, even as President Donald Trump intensifies his unprecedented public campaign to force the central bank chief out. Powell's resolve comes amid Trump's escalating criticisms over interest rate policy and new attacks on a $2.5 billion renovation of the Fed's headquarters.

The standoff between the nation's top monetary policymaker and its chief executive has reached new intensity in recent weeks, with Trump repeatedly calling for Powell's resignation during public appearances and on social media. The Fed chair has responded by quietly telling confidants he plans to serve out his term, which runs through 2026, according to people familiar with the matter.

Policy Gridlock Persists

The Federal Open Market Committee left rates unchanged at 4.25%–4.50% at its June meeting, marking the fourth consecutive hold as inflation remains stubbornly above the Fed's 2% target. Recent data showed prices rose 2.7% in June from a year earlier, complicating the central bank's path toward potential rate cuts.

"There's simply no economic case for easing right now," said one Fed official who asked not to be named discussing internal deliberations. "The data hasn't moved enough to justify a cut, regardless of political pressure."

Renovation Controversy Adds Fuel

Trump has recently seized on the Fed's massive headquarters renovation project as another line of attack, questioning Powell's oversight of what he called "wasteful spending" at a time of elevated interest rates. The multi-year project, approved before Powell became chair, has drawn scrutiny from Congress in recent months.

A Fed spokesperson declined to comment on the renovation controversy or Powell's private conversations, reiterating that the central bank makes policy decisions independently based on economic data. Attempts to reach White House officials for comment were unsuccessful.

Market participants appear largely unfazed by the political drama, with fed funds futures pricing in just a 15% chance of a rate cut at the July meeting. However, some analysts warn the public feud could eventually undermine confidence in the Fed's independence if it persists.

Correction: An earlier version of this article misstated the current inflation rate. Prices rose 2.7% in June, not 2.5%.