Trump called for rate cuts on Truth Social, contradicting Fed Chair Jerome Powell, who said there’s no rush to lower rates.
Powell reaffirmed the Fed’s independence, stating that political pressure won’t influence monetary policy decisions.
Markets expect no rate cuts until at least June or July, especially after higher-than-expected inflation data in January.
President Donald Trump has once again flipped his stance on Federal Reserve policy, taking to social media on Wednesday morning to demand lower interest rates—a move that directly clashes with recent statements from the central bank.
“Interest Rates should be lowered, something which would go hand in hand with upcoming Tariffs!!! Lets Rock and Roll, America!!!”
ICYMI: 🇺🇸 President Donald Trump has called for lowering interest rates, stating they would "go hand-in-hand" with upcoming tariffs. pic.twitter.com/cZL4HaqXY8
That’s what Trump posted on Truth Social, leaning hard into his signature all-caps enthusiasm. But here’s the thing—just a day earlier, Fed Chair Jerome Powell made it pretty clear that policymakers aren’t exactly rushing to slash rates. Instead, they’re keeping an eye on inflation trends before making any moves.
The Fed Stays Cool, Trump Heats Up
Speaking before the House Financial Services Committee on Wednesday, Powell dodged any direct response to Trump’s latest call for easier monetary policy. When asked if political pressure influences Fed decisions, he didn’t hesitate:
“That’s correct.”
Translation? The Fed isn’t budging just because Trump says so. Powell also doubled down on the Fed’s independence, emphasizing that decisions will be based purely on economic conditions, not political rhetoric.
A Moving Target: Trump’s Ever-Shifting View on Rates
Trump’s stance on the Fed has been all over the place. Early in his presidency, he demanded immediate rate cuts, even though the White House has no direct control over the central bank. But then, just days later, he praised the Fed’s decision to keep rates unchanged during their January meeting.
More recently, Treasury Secretary Scott Bessent suggested the administration was more interested in driving down long-term bond yields rather than pushing for a cut in the short-term fed funds rate. Yet, Trump’s latest post suggests a return to pressuring the Fed to loosen policy.
What the Market Thinks
So, what’s actually happening with rate expectations? Market data suggests the Fed will likely hold steady until at least June or July. And beyond that? Maybe one cut, maybe none. Some economists—including those at Bank of America—believe the Fed won’t ease at all this year, especially after cutting rates by a full percentage point in 2024.
Adding another twist, about 30 minutes after Trump’s post, the Bureau of Labor Statistics dropped fresh inflation numbers—and they weren’t exactly rate-cut-friendly. Consumer prices climbed more than expected in January, pushing 12-month inflation to 3% (3.3% excluding food and energy). The market took that as confirmation that the Fed will likely sit tight in March—and possibly wait until September or later before even considering another cut.
Bottom line? Trump may want lower rates, but for now, the Fed isn’t playing along.
Michael is a BSBA Management graduate from Mindanao State University. He has been a Content Writer since 2019, covering a wide range of topics. His interest in crypto began in 2021, eventually becoming his main focus. For almost four years, he has worked with Aiur Labs and holds BTC, TRON, and a few memecoins.
