US President Donald Trump called on Federal Reserve Chairman Jerome Powell on Friday to cut interest rates, even as his tariff campaign rattled markets and raised fears of a rebound in inflation.
"This is the perfect time for the Fed Chairman to cut rates. He's always late, but now he can change his image, and fast," Trump said in a post on Truth Social. He explained that energy prices are down, interest rates are down, inflation is down, even egg prices are down 69%, and jobs are up, all in the space of two months—a big win for America. Lower interest rates, Jerome, and stop playing politics!"
Trump's post comes as global stock markets are in freefall, and the president's new tariff policy, unveiled Wednesday, has raised concerns about a global economic slowdown, according to CNBC.
The new trade policies are also a barrier to the Fed cutting interest rates. The central bank has paused rate cuts at recent meetings, in part because progress on lowering inflation appeared to have plateaued.
The new tariffs could lead to a widespread rise in prices, at least temporarily, further complicating the inflation picture.
On Friday, Powell told business reporters in Arlington, Virginia, that the Federal Reserve is "well-positioned to wait for more clarity" before making changes such as interest rate cuts. He also said the announced tariffs were "much larger than expected."
Market interest rates have fallen sharply this week, with the 10-year Treasury note yield now below 4%. Treasury yields often fall when investors fear a potential recession.
Trump has been vocal about central bank policy during his first term as president and has been at odds with Powell. This has led to speculation that he may seek to remove the Fed chairman before his term ends next year. Trump stated in December that he has no intention of firing Powell, while the Fed chairman said he does not believe the president is legally authorized to do so.
Follow the latest news on Google News
