US Fed maintains interest rates amid Trump's pressure and stock market records

The US Federal Reserve (Fed) at its first meeting in 2026 voted to keep the key interest rate in the range of 3.5-3.75%. The decision was made by a majority vote (10 to 2), despite public criticism from President Donald Trump, who demands a more aggressive easing of monetary policy to stimulate the economy. This was reported by the BBC, writes UNN.

DetailsFed Chairman Jerome Powell, during a press conference, strongly defended the central bank’s autonomy. This was his first public appearance after the Department of Justice (DoJ) launched a criminal investigation into his Senate testimony regarding the costs of renovating the Fed’s headquarters. Powell called this investigation a “pretext” for political pressure.

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If you lose the independence of the central bank, it will be extremely difficult to restore confidence in the institution

He added that the absence of direct control by elected officials is the foundation of a stable economy. Meanwhile, Powell’s term ends in May 2026, and Trump, according to sources, is considering loyal candidates for his replacement, including Kevin Hassett or Christopher Waller.

State of the economy and market reactionThe Fed’s decision was based on “steady pace” of economic growth and gradual stabilization of the labor market. Although inflation still exceeds the target level of 2%, Powell noted that the outlook has improved. Two Trump appointees, Stephen Miran and Christopher Waller, who advocated for a 0.25% reduction, voted against keeping the rate.

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The stock market reacted to the news with a historic record: the S&P 500 index crossed the psychological mark of 7000 points for the first time in history. Investors, although expecting a pause, remain optimistic about possible rate cuts later this year. Morgan Stanley Wealth Management analysts note that the market will have to be patient while the regulator balances between supporting employment and curbing prices. 

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