WASHINGTON (AP) — The Federal Reserve will likely keep its key short-term interest rate unchanged on Wednesday, despite harsh criticism from President Donald Trump and his demand that the Fed reduce borrowing costs. After causing a sharp drop in financial markets two weeks ago by saying he could fire Fed Chair Jerome Powell, the Republican leader backed off and said he had no intention of doing so. Still, he and Treasury Secretary Scott Bessent have said the Fed should cut rates. The heightened scrutiny shows that even as the Trump administration backs off its threats to fire Powell, the Fed is still subject to unusually sharp political pressures, despite being an independent agency.
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