Donald Trump sent a handwritten note to Fed Chair Jerome Powell, asking the "tool late" chair to cut interest rates to 1%.
US President Donald $TRUMP has continued to press Fed Chair Jerome Powell and the committee to cut rates from the benchmark 4.25% to 4.5%. This time, the president sent Powell a handwritten note, detailing how other countries have low rates to force the Fed
Donald Trump sends Powell a handwritten note.
In an X-post, the White House's Rapid Response account shared a photo of a handwritten note that the US president sent to Jerome Powell. The president wrote the note on a document that listed the global central bank’s rate breakdown for various countries.
Donald Trump singled out Switzerland, Cambodia, Japan, Denmark, Thailand and the Seychelles, which currently have the lowest rates between 0.25% and 1.75%, saying US rates should be in the same range. Trump also addressed Powell, saying that he is generally “too late.”
The president further remarked that Powell has cost the USA and continues to do so by not cutting rates. He then urged the Fed chair to cut interest rates “a lot.” US interest rates are currently at 4.25% to 4.5%, but Trump believes they should be much lower.
Donald $TRUMP has continued to pressure the Fed to cut interest rates even as the FOMC left rates unchanged at its June meeting earlier this month.
The president recently called on Powell to resign if he doesn’t cut rates. Trump has also made it clear that he will only nominate a Fed chair who is willing to cut rates.
Powell's term expires in May next year, but Trump is already actively looking for a replacement and has hinted on several occasions that he could make an announcement before the year is out. Trump said he is already interviewing candidates and has four on his shortlist.
Traders are betting on a July rate cut.
Although Jerome Powell has so far stuck to a wait-and-see approach before cutting rates, traders are starting to bet on a rate cut by the committee as soon as July. This suggests that Donald Trump’s decision to cut rates at the next FOMC meeting could influence the FOMC’s decision.
CME FedWatch data showed odds of a rate cut at July's FOMC meeting were unchanged, falling to 78.8% from 87.6% two weeks ago. On the other hand, there is now a 21.2% chance that the Fed could cut rates by 25 basis points (bps) at the July 30 FOMC meeting.
Federal Reserve Governor Christopher Waller said an interest rate cut could come as early as next month. While Powell is committed to keeping rates steady, other committee members could bow to Trump’s demand and vote for a rate cut.
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