Fed's Powell tells Trump rate decisions will be made 'as required by law'

Meeting comes as US President continues to call on central bank to lower interest rates

Federal Reserve Chairman Jerome Powell was at the White House on May 29. EPA

Federal Reserve Chairman Jerome Powell met President Donald Trump at the White House on Thursday, the US central bank said in a statement.

The Fed said the meeting occurred at Mr Trump's invitation and that Mr Powell did not discuss his expectations on interest rates, “except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook”.

“Finally, Chair Powell said that he and his colleagues on the [Federal Open Market Committee] will set monetary policy, as required by law, to support maximum employment and stable prices and will make those decisions based solely on careful, objective, and non-political analysis,” the Fed said.

The Fed enjoys broad independence to conduct monetary policy without political pressure from the president or Congress.

However, Mr Trump has repeatedly lashed out at Mr Powell for not lowering interest rates in recent months. Earlier on Thursday, Mr Trump shared a post on Truth Social that again called on the Fed to cut rates.

White House Press Secretary Karoline Leavitt told reporters that Mr Trump conveyed to Mr Powell that he believed he was making a mistake by not lowering rates.

"Which is putting us at an economic disadvantage to China and other countries, and the president's been very vocal about that," she said during a press briefing.

The Fed has not adjusted US interest rates since December, pointing to heightened uncertainty over Mr Trump's tariff agenda. The current federal funds rate is roughly 4.3 per cent.

Minutes released from the central bank's May 6-7 meeting on Wednesday showed that the Fed is concerned about stagflation effects Mr Trump's tariffs may have on the economy. Stagflation indicates a period in which the economy posts weak growth and high inflation.

Officials also said the tariffs could force them to choose to rescue only one of their two mandates: either price stability or maximum employment.

“Participants noted that the committee might face difficult trade-offs if inflation proves to be more persistent while the outlooks for growth and employment weaken,” the minutes read.

Mr Trump said last month that he would not seek to oust Mr Powell before his term expires as chairman next year, after previously suggesting he has the authority to do so. A Supreme Court ruling last week signalled that a president does not have the legal authority to fire Federal Reserve board members.

“The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States,” justices wrote in a ruling that upheld Mr Trump's removal of members of two other independent boards.

Mr Powell has maintained he intends to serve out his full term. He has not said if he will continue on as a Fed governor.