The Federal ReserveannouncedWednesday, July 30, that it is leaving its benchmark interest rate unchanged, at a range of 4.25% to 4.5%. The decision isextremely foolish.By keeping rates at a comparatively high level, relative to the average rate over the past two decades, the Fed is unnecessarily suppressing economic growth and making it harder for consumers and businesses to finance debt. Moreover, the unemployment rate rose in July to 4.2%, marking an uptick from June and underscoring that the labor market is cooling, and the economy is in need of support.The federal funds rate the interest rate at which depository institutions lend reserve balances to each other overnight is a powerful tool used by the Federal Reserve to influence U.S. economic activity. Changes to this rate ripple throughout the economy, affecting borrowing costs, consumer behavior, and, ultimately, the broader business cycle.BACK FROM SCOTLAND, TRUMP ENTERS CRUCIAL TRADE WEEK AND EYES FED'S DECISION ON RATE CUTSHigher rates mean it becomes more expensive for banks to borrow money overnight. This cost is often passed on to consumers and businesses through higher interest rates on loans and credit.When the Fed lowers the funds rate, borrowing becomes cheaper, and this generally stimulates more economic activity.Most analysts believe that the Federal Reserves decision to keep interest rates high, relative to the average rate over the past 15 years, is being driven by fear. Fed Chairman Jerome Powell and some of the other leaders at the central bank say that if they lower interest rates, inflation will surge, driving up already high costs on goods and services across the economy.GOOD ECONOMIC DATA IS BAD NEWS FOR TRUMPS INTEREST RATE PUSHHowever, the best evidence tells a very different story.First of all, there currently is no inflation crisis.The Bureau of Labor Statistics reported in July that the consumer price index one of the most popular measures of inflation increased in June by 2.7% compared to one year prior.Although the CPI in June was slightly higher than the CPI recorded in May (2.4%), both months remained below the levels recorded in December 2024 (2.9%) and January 2025 (3%). Additionally, inflation has leveled off substantially from where it was during much of Joe Bidens presidency.Second, historical data and recent experience show that the Feds view of inflation and interest rates is completely misguided. The Feds benchmark rate is not a significant factor in causing or preventing inflation.TRUMPS HOUSING CHIEF RIPS POWELL FOR BLOWING MILLIONS ON FED FACELIFT DURING HOUSING CRISIS HE PERPETUATESFor example, during President Barack Obamas eight years in office, the Feds benchmark interest rate was extremely low,consistently less than 1%. Yet,inflation was also extremely low, even during years in which the economy added a significant number of jobs.Notably, during President Donald Trumps first term, the Federal Reserve increased interest rates substantially though not nearly as high as they are now and inflation remained relatively the same as it had been under much of Obamas term.These are not exceptions to the rule. A review of data over the past half-century shows theres no strong correlation between the Feds interest rate and inflation.FEDERAL RESERVE LEAVES INTEREST RATES UNCHANGEDThat doesnt mean interest rates are irrelevant, or that they should be at or near zero. Keeping interest rates too low over a long period can create significant unintended consequences, such as encouraging increases in public and private debt. But the idea that Powell and his pals at the Fed are staving off an inflation crisis by keeping rates high is delusional.All that the Fed is achieving by refusing to cut rates even by just half a percentage point is making it costlier for everyone to finance debt. This has enormous economic implications, especially for businesses wanting to expand and families looking to buy or sell a home, car, or another high-priced item.The Feds decision to keep rates high is, by design, keeping Americas economy from booming.If the Feds benchmark interest rate isnt the most important factor when considering inflation, then what is? The answer is, it all depends on the circumstances.SEN RAND PAUL: THERE ARE $186 BILLION REASONS WHY WE MUST AUDIT THE FEDInflation occurs when the prices of goods and services across the economy rise, making your money worth less than it was before. One common cause is when people are spending a lot and demand for things like food, housing, or cars increases faster than companies can supply them. When this happens, businesses often raise prices because they know customers are willing to pay more.Another cause is when it becomes more expensive for businesses to produce goods. If wages go up, raw materials cost more, or energy becomes pricier, companies may pass those extra costs on to consumers by raising prices.Inflation can also happen when theres a large increase in the amount of money circulating in the economy. If the government prints a lot of money or spends heavily without matching production, the value of money can fall. When each dollar buys less than before, prices rise to make up the difference.TRUMP IS CONCERNED ABOUT HOW THE FED IS MANAGED MORE THAN ABOUT FIRING POWELL, SAYS DEPUTY CHIEF OF STAFFDuring the Biden presidency, all these things occurred. Biden and his Democratic allies in Congress spent obscene amounts of money, imposed policies that sent energy prices skyrocketing, increased regulatory burdens on businesses, and discouraged people from working by hooking millions on government programs.CLICK HERE FOR MORE FOX NEWS OPINIONAdditionally, COVID-19 lockdowns, Russias war in Ukraine and instability in the Middle East raised uncertainty and, in some cases, severely impacted supply chains, raising prices on a long list of goods and services.But now, the lockdowns are over, supply chains and markets have adjusted to the recent international turmoil, investment in America is on rise, and people are back to work.Theres simply no reason to believe that a modest interest rate cut would cause inflation to increase dramatically, if at all.Why, then, are Powell and the other Fed governors keeping rates higher than needed? Perhaps its because they dont like the president. Or maybe its because they dont understand what truly causes inflation.Either way, it seems apparent that a change in leadership is desperately needed at Americas central bank.CLICK HERE TO READ MORE FROM JUSTIN HASKINS