Steve Hanke says Fed likely to hold rates as inflation remains stuck

In an interview with Beincrypto, former Reagan advisor Steve Hanke said he expects the Federal Reserve to hold interest rates as inflation remains stuck, noting that markets widely expect the Fed to stand pat at Wednesday’s FOMC meeting.

Hanke pointed to persistent inflation and growing policy uncertainty, arguing that monetary policy is loosening in part under pressure from the White House. He said recent actions — including a Department of Justice criminal probe into Fed Chair Jerome Powell — are likely to harden the central bank’s resolve rather than prompt compliance with political demands.

Hanke also warned that aggressive tariff tactics have prompted pushback from trading partners and undermined confidence in US economic leadership, citing rejected tariff threats and new trade deals by other countries. He noted rallies in gold and precious metals as signs markets may be positioning for gradual dollar erosion, while also saying concerns about dollar weakness are sometimes overstated.