0
0
For anyone who follows the White House on social media page or takes a look at Donald Trump’s own media platform, Truth Social, it’s easy to find misleading comments about the U.S. economy. Although it has been described as “strong” and “prosperous” by both him and his administration, the platform simply blames all negative figures on the Biden administration, which he has repeatedly claimed left him an economic “mess.” With a similar rhetoric likely to be repeated ahead of tonight’s State of the Union address, it may be prudent to look at the data and research provided by those who best understand the macroeconomic state of the U.S: the Federal Reserve.
At the end of last year, the Federal Reserve announced that joblessness and inflation were on the rise despite overall economic growth, as unemployment increased through September. According to the Federal Reserve Board of Governors, the U.S. economy risks continued inflation, as it remains “somewhat elevated.” To counter this, at the end of 2025 the Committee decided to lower the range for the federal funds rate from 3½ to 3¾ percent, while further seeking to achieve “maximum employment” and keep unemployment under 2%. The Fed continues to monitor the stance of monetary policy using all available resources.
Since Trump returned to office just over a year ago, the Federal Reserve has faced an unprecedented degree of market fluctuation and volatility. Geopolitical events have created greater risks for investors, as well as turbulence that has filtered into the U.S. domestic economy. President Trump’s mass announcement of tariffs earlier in the year, on what he called “Liberation Day”, triggered one of the largest slumps in the U.S. stock market since COVID-19. While there was a swift recovery from this sudden downturn, it left a mark on the Fed, as the U.S. dollar suffered a record decline among foreign reserve stocks, replaced instead by growth in gold, Euro, and even Renminbi.
Further criticism of Fed Chair Jerome Powell from Trump himself has also cast a shadow over the central bank this year, as repeated calls to have the chair “fired” on various U.S. media outlets have caused friction between the executive branch and the Fed.
Despite the U.S. economy growing by over 4% across 2025, this announcement by the Fed will come as a disappointment to the MAGA movement. Trump was elected on the promise of creating more jobs for working-class Americans and reducing the high levels of inflation brought on by the Biden administration in the wake of the COVID-19 pandemic. This unanimous announcement by the Fed may therefore not be viewed favourably by the Trump administration and may leave Powell and the institution open to further criticism soon.
However, with Trump still insisting on imposing global tariffs despite last week’s Supreme Court ruling, it is unlikely that there will be any major positive shifts, as unemployment and inflation continue to rise in the U.S. domestic economy. And as these figures come straight from one of the world’s largest and most respected central banks, it may be difficult for the President to call this “fake news” ahead of his anticipated speech tonight.
Edited by Sanjanaa Radhakrishnan
Average Rating