U.S. President Donald Trump, in a statement made on the Truth Social platform, reiterated his call for the Fed to cut interest rates.
President Trump: "There is no inflation, gas, energy, groceries, and almost everything is decreasing! The Fed should lower interest rates like Europe and China. What is happening with 'Mr. Powell too late'? This is really unfair at a time when America is ready to flourish!"
The prospect of interest rate cuts that Trump has long desired has returned to the agenda with a 90-day tariff reduction agreement reached between the U.S. and China. Under the agreement, the 145 percent tariff imposed on China has been reduced by 115 percent. This development has reinforced expectations that inflationary pressures may ease and trade relations may calm.
Trump, who has pressured the Fed to lower policy interest rates since taking office, had previously hinted at firing Fed Chairman Jerome Powell when he opposed him. Interest rates currently range from 4.25 to 4.5 percent. However, Powell has yet to change policy so far despite pressure from the White House.
The Fed's hesitation to cut interest rates largely stems from uncertainty in the economic outlook. One of the main reasons for this uncertainty is the Trump administration's tariff policy, particularly towards China. Higher tariffs risk pushing consumer prices up by increasing costs for importers and exporters.
However, the latest agreement shows that a more peaceful dialogue process may be initiated not only with China but also with other trade partners. According to experts, temporary tax cuts could create a new direction not only for the market but also for pressure on the Fed's interest rate policy.