US President Donald Trump on Friday called on Federal Reserve Chair Jerome Powell to cut interest rates immediately, even as the central bank faces mounting pressure over inflation concerns triggered by his administration’s sweeping new tariffs.
“This would be a perfect time for Fed Chairman Jerome Powell to cut interest rates,” Trump posted on Truth Social. “Energy prices are down, Interest rates are down, inflation is down, even eggs are down 69%, and jobs are UP, all within two months — A big win for America. Cut interest rates, Jerome, and stop playing politics!” he added.
Trump’s comments come just two days after he announced aggressive new tariffs, which have rattled global markets and sparked fears of a fresh inflationary wave.
Earlier on Friday, Federal Reserve Chair Jerome Powell had warned that the tariffs are “significantly larger than expected” and are “highly likely” to cause at least a temporary rise in inflation. He added, “It is also possible that the effects could be more persistent.”
Powell, speaking to reporters in Arlington, Virginia, emphasised the Fed's cautious approach, saying the central bank is “well positioned to wait for greater clarity” before adjusting interest rates. “There’s a lot of waiting and seeing going on, including by us,” he said. “And that just seems like the right thing to do in this period of uncertainty”, Powell added.
According to CNBC News, the market has already responded to growing recession fears, with the 10-year US treasury yield falling below 4%. Meanwhile, traders are now pricing in at least four 0.25-point rate cuts this year, up from the Fed’s earlier projection of two.
However, the Fed’s main concern remains inflation. “Our obligation is to make certain that a one-time increase in the price level does not become an ongoing inflation problem,” Powell said, pointing to the complexities created by Trump’s trade policies.
Economists, including Kathy Bostjancic of Nationwide, believe the Fed is in a difficult position. “The Fed is in a tough spot with inflation set to accelerate and the economy poised to slow,” she said, as quoted by the news agency AP.
Despite market jitters, Trump has dismissed concerns, comparing the volatility to a patient undergoing surgery. Powell, when asked about the remarks, declined to respond directly: “I make it a practice not to respond to any elected officials’ comments… It’s just not appropriate for me.”
“This would be a perfect time for Fed Chairman Jerome Powell to cut interest rates,” Trump posted on Truth Social. “Energy prices are down, Interest rates are down, inflation is down, even eggs are down 69%, and jobs are UP, all within two months — A big win for America. Cut interest rates, Jerome, and stop playing politics!” he added.
Trump’s comments come just two days after he announced aggressive new tariffs, which have rattled global markets and sparked fears of a fresh inflationary wave.
Earlier on Friday, Federal Reserve Chair Jerome Powell had warned that the tariffs are “significantly larger than expected” and are “highly likely” to cause at least a temporary rise in inflation. He added, “It is also possible that the effects could be more persistent.”
Powell, speaking to reporters in Arlington, Virginia, emphasised the Fed's cautious approach, saying the central bank is “well positioned to wait for greater clarity” before adjusting interest rates. “There’s a lot of waiting and seeing going on, including by us,” he said. “And that just seems like the right thing to do in this period of uncertainty”, Powell added.
According to CNBC News, the market has already responded to growing recession fears, with the 10-year US treasury yield falling below 4%. Meanwhile, traders are now pricing in at least four 0.25-point rate cuts this year, up from the Fed’s earlier projection of two.
However, the Fed’s main concern remains inflation. “Our obligation is to make certain that a one-time increase in the price level does not become an ongoing inflation problem,” Powell said, pointing to the complexities created by Trump’s trade policies.
Economists, including Kathy Bostjancic of Nationwide, believe the Fed is in a difficult position. “The Fed is in a tough spot with inflation set to accelerate and the economy poised to slow,” she said, as quoted by the news agency AP.
Despite market jitters, Trump has dismissed concerns, comparing the volatility to a patient undergoing surgery. Powell, when asked about the remarks, declined to respond directly: “I make it a practice not to respond to any elected officials’ comments… It’s just not appropriate for me.”
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