- Trump demanded a full 1% Fed rate cut despite solid job growth in May.
- He blamed Powell for high borrowing costs and praised other central banks’ cuts.
- Markets show low confidence in any rate cuts soon, especially after strong wage data.
President Donald Trump turned up the pressure on Federal Reserve Chair Jerome Powell again Friday, urging an aggressive interest rate cut—even though the latest jobs data came in stronger than expected. Posting on Truth Social, Trump called for a full percentage point reduction, dubbing it “Rocket Fuel” for the economy. This bold demand comes as markets show virtually no expectation for such a drastic move when the Fed meets later this month.
Despite 139,000 new jobs added in May and a relatively healthy unemployment rate of 4.2%, Trump insisted that borrowing costs are still far too high. He argued that lower rates are essential for tackling looming debt repayments and staying competitive with global central banks like the European Central Bank, which just made its eighth cut since June last year. Trump’s tone was as pointed as ever, calling Powell “Too Late at the Fed” and blaming him for holding the economy back—despite also claiming the U.S. is “doing great.”
The broader market, however, isn’t buying into Trump’s narrative. With wage growth surprising to the upside and inflation fears lingering—especially due to Trump’s own tariff policies—investors are less certain that the Fed will cut rates anytime soon. In fact, expectations for a September cut are now at just 62%, down from earlier in the week. Chances of two or more cuts before the end of 2025 are hovering around 22%, according to CME Group data.
Trump’s posts suggest he sees a rate cut as a win-win: if inflation rises again, Powell can simply raise rates back up. “Very Simple!!!” he wrote, in his trademark caps-and-exclamation style. Yet analysts warn that central banking doesn’t quite work like that. As Trump keeps hammering Powell from the sidelines, the Fed finds itself in the tricky position of balancing market data, inflation signals—and a very vocal president.
