US President Donald Trump called on Federal Reserve Chairman Jerome Powell to cut interest rates, even as his tariff campaign rattled markets and raised fears of a rebound in inflation.
“This is the perfect time for the Fed Chairman to cut interest rates,” Trump said in a post on Truth Social. “He’s always late, but now he can change his image, and quickly.”
He added, "Energy prices are down, interest rates are down, inflation is down, even egg prices are down 69%, and jobs are up, all in the space of two months. That's a huge win for America. Lower interest rates, Jerome, and stop playing politics."
According to CNBC, Trump's post comes as global stock markets are experiencing a sharp decline, and the president's new tariff policy, unveiled on Wednesday, has raised concerns about a global economic slowdown.
New trade policies also pose a barrier to the Federal Reserve cutting interest rates. The central bank has paused interest rate cuts at its recent meetings, in part because progress in reducing inflation appeared to have plateaued.
The new tariffs could lead to a widespread rise in prices, at least temporarily, further complicating the inflation picture.
On Friday, Powell told business reporters in Arlington, Virginia, that the Federal Reserve is “well-positioned to wait for more clarity” before making changes such as interest rate cuts, and he also said that the announced tariffs were “much larger than expected.”
Market interest rates have fallen sharply this week, with the yield on the 10-year US Treasury note now below 41 TP3T. Treasury yields often fall when investors fear a potential recession.
Trump has been vocal about central bank policy during his first term as president, and has been at odds with Powell, leading to speculation that he may seek to remove the Fed chairman before his term ends next year.
Trump stated in December that he had no intention of firing Powell, while the Fed chairman said he did not believe the president was legally authorized to do so.
