On June 24, 2025, Trump posted on his social media platform 'Truth Social,' stating, 'Too late, Mr. Fed Chair Jerome Powell will explain to Congress today why he refuses to cut interest rates. Europe has cut rates ten times, while we have done so zero times. With no inflation and a booming economy - we should at least cut by 2 to 3 percentage points. This would save the U.S. $800 billion annually.'
Since Trump took office in January, how many times has he urged Powell to cut rates? Why does Trump urge? Why does Powell not cut rates?
I. How many times has Trump urged Powell?
On June 24, President Trump posted on his social media platform 'Truth Social,' stating, 'Too late, Mr. Fed Chair Jerome Powell will explain to Congress today why he refuses to cut interest rates. Europe has cut rates ten times, while we have done so zero times. With no inflation and a booming economy - we should at least cut by 2 to 3 percentage points. This would save the U.S. $800 billion annually.'
On June 21, Trump stated on social media: 'Too late, Mr. Powell always complains about cost issues - most of which are caused by the Biden administration. The best way he can contribute to America right now is to decisively cut interest rates. If he could cut rates by one or two basis points, this 'wooden-headed' individual could save America up to $1 trillion annually. Although my strong criticism may make it harder for him to fulfill his duties (to cut rates), I have tried all moderate means: I have been polite, neutral, and also tough, but unfortunately, all have failed! Don’t use 'the possibility of inflation risks in the future' as an excuse - because there is absolutely no inflation right now! Even if inflation does arise in the future, we can raise rates then. I really don’t understand why the Federal Reserve Board doesn’t replace this complete idiot! Perhaps I need to change my mind on whether to fire Powell. But no rush, his term is almost over anyway!'
On June 18, Trump stated that the U.S. has collected $88 billion from tariffs and that 'there is no inflation,' calling again for interest rate cuts. He said, 'If the Federal Reserve cuts rates, we will buy U.S. Treasury bonds at lower prices. However, frankly speaking, we have a stupid person in the Federal Reserve who might not cut rates today. He is doing a terrible job. We should cut rates by 200 basis points, and it would be even better if we could cut by 250 basis points. I plan to first take a short-term strategy of significantly lowering rates, then shift to a long-term strategy.'
On June 13, Trump stated that he did not intend to fire Federal Reserve Chair Powell, but called him a 'fool' for not cutting rates. During his speech, Trump claimed that a 200-basis-point cut could save the U.S. $600 billion annually. Trump said, 'We are spending $600 billion every year just because a 'fool' is sitting here saying, 'I don’t see enough reason to cut rates now.' He added that if inflation rises, he would agree to the Federal Reserve raising rates, 'but for now, inflation is decreasing, and I may have to take some measures.'
On June 12, Trump noted: I will not fire Federal Reserve Chair Powell; he just needs to lower interest rates, as our inflation data is performing well. I once told Powell that there was no need to keep rates at such high levels; if inflation appears within a year, then raise rates.
On June 6, Trump stated that Federal Reserve Chair Powell should cut rates. Interest rates should be lowered by a full percentage point; Europe has cut rates ten times, while we have yet to take any measures. The 'too late Mr.' Federal Reserve is a disaster.
On June 4, Trump posted on social media that the ADP data was out, and 'too late Mr. Federal Reserve Chair Powell must cut rates now.' He is unbelievable; Europe has cut rates nine times.
On May 14, Trump posted on 'Truth Social,' stating that there is no inflation, and the prices of gasoline, energy, groceries, and almost all other goods are falling! The Federal Reserve must cut rates like Europe and China. 'Too late, Mr. Powell, why are you still hesitating? This is unfair for the thriving American economy. Let things take their course; it will be a wonderful thing!'
On April 23, Trump stated at the swearing-in ceremony of the chairman of the U.S. Securities and Exchange Commission that he had no intention of firing Federal Reserve Chair Powell, though he was disappointed that the Federal Reserve had not cut rates faster. 'Never,' Trump told reporters, 'the media always messes things up. I did not intend to fire him. I hope to see him be more aggressive in his thoughts on lowering rates.' Trump said, 'Grocery prices have fallen; everything is declining. The only thing that hasn’t fallen but hasn’t risen much is interest rates.' Trump stated, 'We believe the Federal Reserve should cut rates; now is a perfect time. We want our chair to cut early or on time (to cut), not late.' Trump also stated that the stock market is performing well.
On April 22, Trump stated that if Federal Reserve Chair Jerome Powell does not cut rates immediately, the country's economy may slow down. Trump posted on his social media platform on Monday asserting that the decline in energy and daily goods prices determines 'there will almost certainly be no inflation.' 'But the economy may slow down unless 'too late Mr.' this big waste of space cuts rates now,' Trump again referred to Powell with contempt.
On April 18, President Trump spoke at the White House, reiterating that Federal Reserve Chair Powell should cut rates. He also said that the U.S. is very likely to reach an agreement with Ukraine. Recently, Federal Reserve Chair Powell made it clear in a speech at the Chicago Economic Club that he would not take emergency measures due to market fluctuations. Powell's remarks immediately drew strong criticism from President Trump.
On April 17, Trump again pressured Powell, stating that Powell could leave immediately and urging the Federal Reserve to cut rates.
On April 4, Trump stated: Now is the best time for Federal Reserve Chair Powell to cut rates. Federal Reserve Chair Powell always acts too late. (To Federal Reserve Chair Powell) Cut rates; stop playing politics.
On March 24, during a cabinet meeting at the White House, Trump again urged the Federal Reserve to loosen monetary policy.
On March 19, Trump posted on 'Truth Social,' saying, 'The Federal Reserve better cut rates,' as the impacts of U.S. tariffs begin to permeate the economy.
On February 12, Trump stated that he believes interest rates should be lowered, and cutting rates would complement the upcoming tariff policies.
On January 24, Trump stated at the World Economic Forum in Davos, Switzerland, 'With oil prices falling, I will demand immediate rate cuts; likewise, the whole world should cut rates.'
II. Why is Trump eager to cut interest rates?
Offsetting the impact of tariff policies: The tariff policies implemented by Trump have led to rising costs of imported goods, triggering imported inflation. The U.S. economy faces the risks of intensified inflation and slowed economic growth. He hopes to 'offset' the inflation caused by the tariff policy through interest rate cuts to alleviate economic pressure. (Fortune) reported: Trump hopes to lower interest rates to 'offset' the inflation caused by his own tariff policies. The Associated Press believes that Trump's tariff policies have increased the risk of recession for the U.S. economy, while Trump seems to want to shift the blame to Powell.
Lowering government debt costs: Data from the U.S. Treasury shows that federal debt interest expenses are huge and continually growing. Over the past eight months, federal debt interest expenses totaled about $776 billion, a 7% increase compared to the same period last fiscal year, while the interest burden had already risen to the highest level since the 1990s. Trump believes that the Federal Reserve's interest rate cuts can reduce the financing costs of government debt, claiming that a 2% rate cut could save $600 billion in interest costs annually. However, economists warn that this move could backfire. If rates are cut when there is no need based on economic fundamentals, it could trigger inflation concerns. A subsequent decrease in demand for U.S. Treasuries would further push up bond yields, thus increasing the government's interest burden.
Stimulating economic growth: Lowering interest rates typically increases market liquidity, stimulates corporate investment and consumer spending, and drives economic growth. Trump may believe that the current U.S. economic growth is under some pressure and hopes to boost the economy through interest rate cuts to achieve his economic policy goals, such as promoting employment and enhancing corporate competitiveness, which may also help boost his support among voters.
Promoting stock market performance: Trump views the performance of the U.S. stock market as an important achievement. Interest rate cuts can increase market liquidity, stimulating credit expansion and rising asset prices, leading to a favorable short-term outlook for the stock market, which is beneficial for his voter support.
III. Why doesn’t Powell cut interest rates?
On June 19, Federal Reserve Chair Powell stated that although the Federal Reserve 'can see that the labor market may be slowly and steadily cooling,' the strong labor participation rate and good wage growth mean that this cooling is not a cause for concern. He stated, 'Although uncertainty regarding the economic outlook has decreased, it remains at a high level.' As long as the current labor market conditions persist, combined with reasonable economic growth and gradually declining inflation, Powell said he is willing to wait for more information before deciding on the next steps.
Data shows that although GDP contracted by 0.3% quarter-on-quarter in the first quarter of 2025, the labor market is performing strongly: the unemployment rate remains stable at a low of 4.5%, and hourly wage growth remains above 4%. Powell pointed out that 'hard data' such as consumer spending and business investment still indicates that the economy is expanding at a rate of 1.5%-2%, which contrasts with the weakness of 'soft indicators' like manufacturing PMI. This structural contradiction leads the Federal Reserve to believe that the current economy is not in a recession and does not need to stimulate demand through interest rate cuts.
IV. How do others view the Federal Reserve's interest rate cut issue?
Supporting interest rate cuts:
U.S. Vice President Vance: The Federal Reserve's refusal to cut rates is a monetary policy failure.
Federal Reserve's Goolsbee stated that since Trump's tariffs were imposed on April 2, the lack of obvious inflationary pressure may allow the Federal Reserve to cut rates again.
Federal Reserve Governor Bowman stated, 'If inflationary pressures are controlled, I will support lowering the policy rate as soon as possible at the next meeting to bring it closer to neutral levels and maintain a healthy labor market.'
U.S. Commerce Secretary Rutnik stated, 'The U.S. is the greatest country in the world but has to endure the highest interest rates among all first-world countries. Our Federal Reserve chair is clearly afraid of his own shadow. The really sad part of Powell's remarks is that he claims tariffs have led to 'price increases for some related categories of products, such as personal computers.' You would think Powell should know that personal computers are not subject to tariffs. None are currently. Tariffs on semiconductors and computers will be announced after the Commerce Department's analysis is completed. These high-interest rates are meaningless.'
Director of the Federal Housing Finance Agency,Pulte: Federal Reserve Chair Powell must cut rates immediately.
Opposing interest rate cuts:
Federal Reserve's Barkin stated that current data shows no urgent reason to cut rates; the labor market and consumption remain strong. The final direction of trade policy is still uncertain, and it is unclear how it will affect prices and employment; businesses expect to raise prices later this year due to higher-priced imported goods entering their inventories; businesses not affected by tariffs see the chaos in trade policy as an opportunity to raise prices.
Founder of Bridgewater AssociatesRay Dalio:The Federal Reserve is in a difficult position and should not cut interest rates.
V. Prediction of the Federal Reserve's interest rate cut timeline
Federal Reserve's Harker stated that as the U.S. financial system faces growing challenges, deficits must be controlled, and he is 'very concerned' about the current government fiscal situation. Harker also said, 'In key data, we are becoming increasingly blind. We are concerned that the quality of economic data is declining. Uncertainty makes predicting the monetary policy outlook very difficult. But amid this uncertainty, it is still possible for the Federal Reserve to cut interest rates later this year.'
Citigroup has adjusted its forecast for the Federal Reserve's interest rate cut from July to September.
Jamie Cox, managing partner at Harris Financial Group, stated that although the U.S. labor market remains strong, it is gradually cooling. Given the significant revision of this non-farm report's previous value, I expect the Federal Reserve to restart its interest rate cut mode in July. Current wage levels remain stable, but changes are likely in the coming months. The biggest variable in the job market lies in real estate - early warning signs of risk have emerged in the housing market, and the cooling labor market will exacerbate this trend.
Interest rate futures traders expect the Federal Reserve to cut rates twice this year,in September and December.
Franklin Templeton CEO: The Federal Reserve is expected to cut rates only once in 2025.
EY economist Gregory Daco stated that the Federal Reserve is expected to maintain the benchmark interest rate unchanged at 4.25%-4.50%. Recent comments from the Federal Reserve have reinforced a wait-and-see attitude; amid increasing uncertainty about the economic outlook, officials have not shown urgency to adjust policy. The policy statement may not change significantly. The FOMC may reiterate that inflation is still 'somewhat high,' the labor market is 'solid,' and the unemployment rate 'remains at a low level.' They may reiterate that 'the risks of rising unemployment and inflation have increased,' especially considering the uncertainty about the economic outlook. It is expected that the median dot plot for interest rate expectations will remain unchanged, with two cuts of 25 basis points by the end of the year. The dot plot is still expected to show a further cut of 50 basis points to 3.4% in 2026 and another cut to 3.1% in 2027. Policymakers' median estimate for the long-term neutral interest rate may remain unchanged at 3%.