Tariffs are rising, inflation isn’t going away, and the future looks as uncertain as ever. Yet the Federal Reserve has decided to keep interest rates exactly where they are, unchanged. On the surface, that might look like stability. But underneath, a high-stakes tug-of-war is playing out. One that could reshape everything from mortgage rates to the price of gold.
President Trump wants the Fed to cut rates now by a full 2.5 percentage points to head off a downturn before it begins. Fed Chair Jerome Powell? He wants to wait until the pain shows up in the data. That delay has left investors stuck in the middle. And many are moving into gold as a form of defense.
The Trump Approach: Cut Now, Don’t Wait for a Crisis
President Trump isn’t mincing words. He’s called Jerome Powell “one of the dumbest, and most destructive, people in Government,” accusing the Fed Chair of costing the country “hundreds of billions of dollars” by refusing to lower interest rates. The message is clear: Trump believes Powell’s inaction is dragging the economy down, and he’s not hiding his frustration.1
This isn’t just a personal feud. It’s a battle over strategy. Trump sees the Fed as dangerously slow to react to early signs of trouble. He wants bold, proactive cuts now to head off a recession before it takes hold. On June 20, he even admitted his public pressure might make it harder for Powell to act, but said he’s tried “nice, neutral, and nasty," and nothing has worked. The implication? If Powell won’t move, Trump will keep pushing until someone else does.2
Trump is also eyeing new leadership at the Fed. Powell’s term ends in May 2026, but the president has said he’ll announce a successor “very soon". An unprecedented move that could turn the next Fed Chair into a so-called “shadow” leader. Among the top names floated: Fed Governor Christopher Waller.
Waller isn’t waiting for permission to speak his mind. He’s openly split from Powell, arguing that the Fed should start cutting rates as soon as July. Pointing to cracks in the labor market, he warns that waiting for a full-blown downturn would be a costly mistake. “Why do we want to wait until we actually see a crash before we start cutting rates?” he asked in a recent interview.3
But Waller’s call for early rate cuts hasn’t gone unnoticed, and neither has the timing. With Trump saying he “can’t wait” to replace Powell, some are wondering if Waller’s alignment with Trump’s stance is more than coincidence. It’s sparked talk that he may be positioning himself for the top job at the Fed.
Powell’s Position: Wait for the Data
For now, Powell isn’t budging. At the Fed’s June meeting, rates were left unchanged at 4.25% to 4.5%, marking the fourth straight pause. The Fed’s official statement made it clear why: inflation “remains somewhat elevated,” and even though uncertainty has “diminished,” risks to the economy are still very much in play.4
In plain terms, Powell won’t move until the damage is obvious. Either a weaker job market or a sustained drop in inflation. As Fidelity’s Andrew Garvey put it, “So far employment has continued to hold up, even after the tariff announcements, government layoffs, and fears of a slowdown in manufacturing”. Until the data turns south, the Fed is staying on the sidelines.5
The Fed still projects two small rate cuts by year’s end. But nothing is locked in. In fact, seven policymakers now expect no cuts at all in 2025, up from just four in March.
Powell has made it clear the Fed is still trying to figure things out, saying they need to “learn more about tariffs” and that “it’s hard to know with any confidence how we should react until we see the size of the effects”. That kind of hesitation has rattled markets and increased the sense that the Fed is behind the curve.6
Investors Turn to Gold Amid Confusion
While the Fed and the White House argue over when, or if, rates should come down, investors aren’t waiting around. Many are already turning to gold. Despite the Fed’s hawkish stance, gold has held strong above $3,400 an ounce. And that resilience isn’t just about interest rates. Ongoing geopolitical tensions, especially in the Middle East, sticky inflation, and record central bank buying are all fueling gold’s appeal as a safe-haven asset.
Gold tends to benefit from rate cuts because lower interest rates make it less costly to hold gold, which doesn’t pay interest. And lower rates often weaken the dollar, making gold more valuable in comparison.
J.P. Morgan predicts gold could hit $4,000 an ounce by mid-2026, driven by steady central bank buying, strong investor demand, and the uncertainty that comes with this Fed-White House showdown.
Make no mistake: The Fed’s current approach means any rate cuts will be reactive, not proactive. When the Fed finally cuts rates, it’ll probably be because unemployment is rising. A so-called “bad news rate cut”.
For gold, that’s actually good news. Bad economic news fuels uncertainty. And uncertainty sends investors running to assets that don’t depend on central banks, politics, or government handouts.
Conclusion
Whether Trump succeeds in forcing the Fed’s hand, or manages to install a more dovish Chair, rate cuts are coming. The real question is when. If the Fed waits too long, it could end up scrambling to respond to a full-blown recession.
In uncertain times like these, gold doesn’t need perfect forecasts to perform. It thrives on the one thing Washington seems to deliver in spades: unpredictability.
To learn how holding physical precious metals in a Gold IRA can offer long-term protection from interest rate uncertainty, contact American Hartford Gold at 800-462-0071 today.
_______________
Max Baecker is the President of American Hartford Gold (AHG), the nation’s largest retailer of precious metals. He leads American Hartford Gold’s mission to help clients achieve long-term financial security with physical gold and silver.
Under his guidance, American Hartford Gold has delivered billions of dollars’ worth of precious metals to thousands of satisfied clients.
Max's dedication to upholding American Hartford Gold's industry-leading standards is reflected in its accolades. American Hartford Gold has made numerous high-ranking appearances on the prestigious Inc. 5000 List of America’s Fastest-Growing Private Companies. AHG holds an A+ Rating from the BBB and a 5-Star Rating on Trustpilot from thousands of American Hartford Gold reviews. American Hartford Gold is the only precious metals company trusted and recommended by Bill O’Reilly.
AHG offers investment-grade gold and silver coins and bars at competitive prices. Clients also benefit from its buy-back commitment with no back-end fees. To learn more, visit American Hartford Gold.
Notes:
1. https://www.cnn.com/2025/06/19/economy/trump-fed-rate-cut
2. https://www.cnn.com/2025/06/20/economy/fed-governor-rate-cut-july?iid=cnn_buildContentRecirc_end_recirc
3. https://www.cnn.com/2025/06/20/economy/fed-governor-rate-cut-july?iid=cnn_buildContentRecirc_end_recirc
4. https://www.federalreserve.gov/newsevents/pressreleases/monetary20250618a.htm
5. https://www.fidelity.com/learning-center/trading-investing/the-fed-meeting
6. https://www.cnn.com/2025/06/18/economy/fed-rate-decision-june