Inflation is now at approximately 2.6%, and the Federal Reserve has set a 2% target rate. Hitting that target might be difficult, though, especially given the relationship between President Trump and the Fed.
The President cannot set federal interest rates, supply and demand, or global commodity prices, three of the biggest factors in inflation. Only the Reserve can do that. However, the president’s actions can have an indirect effect on rates. President Trump’s tariffs could raise consumer prices, making the supply of goods significantly outweigh the demand for them. He’s urged the Fed to cut interest rates.
Federal Reserve policymakers are reluctant to lower rates at Trump’s command because it could actually make inflation worse The Fed also wants take closer look on the effects of Trump’s tariffs on the economy.
A president could have some influence on inflation by nominating a Fed Board member who aligns with their ideology when a member’s term expires. A full term for the chair, vice chair, and vice chair for supervision is four years. All other members have 14-year terms.
Ultimately, the Federal Reserve operates independently from the White House, so the agency focuses on long-term economic projections no matter what short-term pressures may come from the president or the public.