June 18 2025 – The Federal Reserve has held interest rates steady—resisting mounting pressure from President Trump to cut—and investors are now preparing for what may come next: a pro-Trump successor at the helm of the world's most powerful central bank.
Global financial advisory giant deVere Group says the central bank's decision is the right one, warning that cutting too soon could have backfired badly and pushed long-term borrowing costs higher, not lower.
Nigel Green, CEO of deVere Group, says: “Trump wants a full-point rate cut to offset the damage from his own tariffs. But if the Fed delivers prematurely, markets will punish that kind of political submission. Long yields could spike, and the cost of capital could rise across the board.”
May inflation data shows some easing—headline CPI dipped to 2.4% and core to 2.8%—but it is not enough for the Fed to justify a move. Wage growth remains resilient, household consumption is firm, and services inflation is still uncomfortably sticky.
“The Fed is right to stay on hold,” says Nigel Green. “The disinflation trend is fragile, the tariff shock is still working its way through, and rate cuts in this environment would send the wrong message.”
Tensions hit a new peak on Wednesday morning, just hours before the central bank's decision, when President Trump launched a personal attack on Fed Chair Jerome Powell during an impromptu press briefing on the South Lawn of the White House.
Speaking beside a new row of flagpoles unveiled as part of a symbolic national display ahead of what the president described as a “potential war with Iran,” Trump again blamed the Fed for slowing the economy and accused Powell of incompetence.
“We're doing well. Well as a country, if the Fed would ever lower rates, you know, we'd buy debt for a lot less,” he told reporters. “Do you ever have a guy that's not a smart person and you're dealing with him and you have to deal? He's not a smart guy.”
deVere points to sharp movements in the yield curve as a warning sign. The 2-year/30-year spread is now at its widest since early 2022. Investors are demanding more compensation to hold long-dated Treasuries amid growing concern about inflation credibility, surging debt issuance, and the creeping politicisation of the Fed.
“What we're seeing now is a re-pricing of long-term risk,” says Green. “If the Fed signals it's willing to bow to political pressure, it damages its ability to anchor expectations—and yields will move accordingly.”
The decision to hold comes against the backdrop of Trump's increasingly aggressive demands for looser monetary policy and his influence over the next central bank leadership decision. Powell's term