Trump Slams Powell Again, Yet Markets Breathe As Iran Rejects President's Demands

Just hours before the Federal Reserve's June policy meeting, President Donald Trump launched a fresh attack on Fed Chair Jerome Powell while sidestepping direct confirmation of a potential U.S. military strike on Iran.

What Happened: Speaking outside the White House on Wednesday, Trump renewed his call for sharply lower interest rates. He argues that the U.S. should be "two to two and a half points lower" given what he described as a low-inflation environment.

"We have almost no inflation. We have only success. I’d like to see interest rates get down now," Trump said, blaming Powell for the high cost of refinancing U.S. debt.

He claimed that just a one-point reduction would deliver meaningful relief on refinancing federal debt, while a two-point cut would save even more over long-term maturities.

"We'd be saving $700 billion, $800 billion—trillions over time,” he says.

Trump describes Powell as someone who "refuses to lower the Fed" and "is not a smart person." Trump went further, accusing Powell of personal bias, saying, "I think he hates me.”

Read Also: No Rate Cuts Yet, Fed Wants To See Where Tariffs Land: Here’s What To Watch Wednesday

What About Europe?

Trump also pointed to Europe's more aggressive monetary easing in 2025.

"Europe had 10 cuts. We had none," he said, adding that some countries with lower rates "can't carry our suitcase."

The remarks come as markets expect the Fed to hold its benchmark rate steady in the 4.25%-4.50% range for the fourth straight meeting, while the updated dot plot may show fewer cuts than traders had previously hoped.

Iran Rejects Trump’s Demands

When Trump reiterated his demand for an "unconditional surrender," calling Iran "schoolyard bullies" with long-standing hostile intentions, it did nothing to sway Iranian Supreme Leader Ayatollah Ali Khamenei.

According to Reuters, Khamenei rejected Trump’s demand for “unconditional surrender” on Wednesday.

The rejection comes after Trump was pressed on U.S. military intentions following a Situation Room meeting on Tuesday. Trump refused to confirm any immediate plans to strike Iran's nuclear infrastructure.

“Nobody knows what I’m going to do,” Trump said.

Regarding hopes of a new round of negotiations, Trump stated that “nothing is too late.”

He added, cryptically, "Next week is going to be very big. Maybe less than a week."

Markets Signal De-Escalation For Now

U.S. markets responded positively to the lack of definitive military escalation.

The Nasdaq 100 — as tracked by the Invesco QQQ Trust QQQ — rallied by 0.7% to 21,850 at last check Wednesday. The S&P 500 rose 0.6% to 6,025.

The gains came as investors priced in a reduced likelihood of imminent U.S. military action in Iran, and speculated about possible diplomatic openings.

In commodities, gold pulled back, while West Texas Intermediate crude fell to $72 per barrel, down more than 2% from the previous day's high. The U.S. dollar also dipped slightly as global risk sentiment improved.

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