Trump demands a 2-point rate cut, criticizing Fed Chair Powell and citing debt cost and inflation control.
The Fed keeps rates unchanged at 4.25%–4.50%, pointing to inflation risks from Trump-era tariffs.
Powell signals possible future cuts, depending on inflation data and economic developments across upcoming FOMC meetings.
Former President Donald Trump continues to urge the Federal Reserve to lower interest rates, warning that the current rate policy is costing the country billions. Hours before the June 18 FOMC decision, Trump repeated his demand for cuts, arguing that lower rates would ease debt costs and improve overall economic flexibility. However, according to a post on X by Watcher Guru, the Powell maintained its target range between 4.25% and 4.50%, citing persistent inflation risks tied to Trump-era tariffs.
https://twitter.com/WatcherGuru/status/1935411333911990659
Trump’s Calls for Rate Cuts Intensify
Speaking at a Flagpole installation at the White House, Trump insisted that the Federal Reserve should reduce interest rates by at least two percentage points. He claimed such cuts would allow the government to purchase debt at lower costs and save significantly on short-term obligations. Trump stated that inflation is now low enough to justify immediate action and criticized Fed Chair Jerome Powell’s leadership, calling him unfit for the role.
Despite expressing doubt that rates would change during the June meeting, Trump continued his criticism on Truth Social. He accused Powell of damaging the economy and claimed the Fed’s refusal to cut rates is harming U.S. competitiveness compared to Europe, where ten rate cuts have already occurred.
Powell Responds with Caution Amid Tariff Concerns
Following the FOMC announcement, Chair Powell defended the decision to leave rates unchanged. He pointed to a resilient labor market and steady economic growth. However, he flagged new inflation concerns stemming from increased tariffs, including those reintroduced under Trump’s trade policies.
Powell explained that while inflation has fallen from 2023 levels, it still remains above the Fed’s 2% target. According to Powell, the labor market shows no signs of overheating, but higher trade costs are pressuring short-term prices. He confirmed that the Fed is being cautious and watching global impacts closely.
Powell also mentioned that rate cuts could still occur later this year if inflation continues to ease. While the Fed holds steady for now, investors are still anticipating possible rate cuts by year-end. With four more FOMC meetings ahead, future decisions will likely depend on inflation data and broader economic signals.
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