Fed Holds Interest Rates Despite Trump’s Appeals

Donald Trump has urged the Federal Reserve to lower interest rates following stronger-than-expected GDP data. However, the Federal Open Market Committee maintained rates at 4.25%-4.5% in July 2025, focusing on inflation risks and a robust labor market.

The Fed’s decision to retain current rates highlights its commitment to economic indicators over external pressures, emphasizing low unemployment and ongoing inflation concerns.

“Recent indicators suggest that the growth of economic activity moderated in the first half of the year. The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated.” — Jerome Powell, Chair, Federal Reserve

The Federal Reserve has withstood political pressure from Donald Trump, who has actively lobbied for interest rate cuts. Despite stronger-than-expected GDP data, the Fed’s decision not to adjust monetary policy underscores a focus on economic fundamentals.

Key figures include former President Trump, who argues for rate reductions to boost economic activity and Jerome Powell, the Federal Reserve Chair, who emphasizes the Fed’s independence. Trump’s statements underline ongoing political challenges for the Fed.

Crypto markets, including Bitcoin and Ethereum, showed minimal volatility following the Fed’s rate decision. High interest rates continue to limit flows into risk assets, with crypto markets responding more to fundamental crypto developments than macroeconomic policy shifts.

The Fed’s choice not to adjust rates demonstrates a commitment to managing long-term inflation and economic stability. Past trends during Trump’s presidency indicated potential volatility in markets whenever rates were adjusted, but the current scenario remains stable.

Historical trends highlight how previous interest rate adjustments impacted digital assets like BTC and ETH. The Fed’s current strategy reflects a cautious approach in light of inflation risks and steady labor market conditions, maintaining stability in uncertain economic times.

There are no immediate changes in Total Value Locked (TVL) in DeFi markets following the Fed’s announcement. Cryptocurrency protocols and main developers remain oriented towards ongoing upgrades rather than external monetary policy changes.

Despite robust economic data, no new funding or easing has been introduced. The Federal Reserve focuses on maintaining existing policy positions, mitigating risks associated with persistent inflation while ensuring a stable monetary environment.