Following the Federal Reserve's decision this week to hold interest rates steady, President Donald Trump took to social media to launch another attack on Fed Chair Jerome Powell, labeling him “Too Late Jerome” and calling him a “fool” with “no clue.” Powell, meanwhile, defended the central bank’s current stance, arguing that doing nothing might actually be the most responsible course of action at this time.

History has shown that central bank leaders often act too slowly—whether it was Arthur Burns during the 1970s stagflation, Alan Greenspan and the dotcom bubble, or Ben Bernanke and the 2008 subprime crisis. Each case reflected a pattern of delayed responses, often due to insufficient or unclear data.

Powell now finds himself in a similarly delicate situation. Trump’s aggressive new tariff policy, introduced in early April, has yet to show clear economic effects. Meanwhile, inflation appears subdued and the job market remains stable. Under these conditions, a policy change could seem premature.

In a post-meeting press conference, Powell emphasized that the Fed sees no need to rush. He cited “no real cost to waiting” as one reason to remain patient, and admitted, “we are not sure what the right thing will be.” The Fed’s current approach, he said, is shaped by the fact that acting in either direction might be a mistake.

Trump disagrees. He insisted inflation has already been tamed and accused Powell of failing to act quickly enough. However, most economists caution that tariff-related inflation may only show up in the coming months, once supply chains and consumer prices adjust.

While recent sentiment surveys show growing concern in both the manufacturing and services sectors, hard data still point to a resilient economy. Nearly 90% of S&P 500 companies have mentioned tariffs during recent earnings calls, but none have reported drastic changes in operations yet.

The real concern, however, is timing. If the Fed continues to rely on labor market indicators, it could be behind the curve. As one long-standing Wall Street saying goes, “the labor market is always the last to know” when a recession hits. Unemployment typically rises only after downturns have already begun.

Some observers argue that the Fed is trapped by its own past mistakes and afraid to act preemptively. But in a volatile policy environment with both inflation and growth risks, waiting might be the least risky option.

For now, Powell is sticking to the Fed’s data-dependent framework, resisting political pressure while remaining flexible. But the debate over whether he's moving “too late” is likely to continue—especially as political and market scrutiny intensifies ahead of the 2025 election.