What Happened: Trump has been outspoken on social media, referring to Powell as “Mr Too Late” and “a major loser” for what he sees as a reluctance to ease policy. However, the Fed Chair doesn’t seem to be in a hurry to cut rates despite the President’s bashing primarily due to three reasons.

Firstly, the president’s demands stand in sharp contrast to the Fed’s “data-driven” approach. Powell and other Fed officials believe that the current inflation rate — above their preferred 2% target — along with a strong job market, does not justify a rate cut. They emphasized the need to be “patient” before making that decision. San Francisco Fed President Mary Daly echoed Powell’s sentiments, noting that the risks to inflation are “higher than they were a year ago,” potentially requiring policy to remain tighter for a longer period, reported Reuters.

Why It Matters: Trump’s pressure on the Fed has been a recurring theme. Although on Tuesday, he told reporters that he had “no intention” of firing Powell, despite his criticisms, Trump continues his calls for a rate cut. His comments have sparked concerns among market watchers. Sen. Elizabeth Warren (D-Mass.) warned that if Trump illegally fires Powell, it could “crash our markets.”

Moreover, CNBC commentator Jim Cramer opined that investors “would actually buy this rally” if Trump did not criticize Powell for "being prudent about rates." The ongoing tension between the President and the Fed Chair continues to influence market sentiment and the future of monetary policy remains uncertain.