President Donald Trump has once again called for lower interest rates, arguing that a rate cut would align with his administration’s tariff strategy.
“Interest Rates should be lowered, something which would go hand in hand with upcoming Tariffs!!! Lets Rock and Roll, America!!!” Trump wrote in a Truth Social post on Wednesday morning.
His statement follows remarks from Federal Reserve Chair Jerome Powell, who recently said policymakers are in no rush to cut rates as they monitor inflation trends.
“With our policy stance now significantly less restrictive than it had been and the economy remaining strong, we do not need to be in a hurry to adjust our policy stance,” Powell said.
While some officials have acknowledged the potential impact of tariffs on prices, Powell has refrained from addressing the matter directly.
Trump’s latest comments signal a renewed push for the Federal Reserve to ease monetary policy, a stance that has shifted in recent weeks.
Earlier this year, he urged an immediate rate cut but later expressed approval of the Fed’s decision to maintain rates at its January meeting.
Treasury Secretary Scott Bessent previously suggested that the administration’s primary concern was the 10-year Treasury yield rather than short-term interest rates.
However, Trump’s Wednesday statement indicates a return to advocating for a more accommodative monetary policy.
Market expectations currently suggest the Fed will keep rates unchanged until at least June or July, with only one potential cut for the remainder of the year.
Some analysts, including those at Bank of America, believe the central bank may refrain from any cuts this year after reducing the benchmark rate by a full percentage point in 2024.
on Jan. 29, the US Federal Reserve kept its key interest rate unchanged, pausing its recent easing cycle.
The Federal Open Market Committee (FOMC) maintained its benchmark borrowing rate at 4.25%-4.5%, following three consecutive rate cuts since September 2024 that totaled a full percentage point.
Fed’s tone on labor market and inflation
In its post-meeting statement, the central bank removed key language from December’s release that indicated inflation had been making progress toward its 2% target.
Instead, the statement noted that inflation remains somewhat elevated, suggesting that policymakers are not yet convinced price pressures are under control.
Additionally, the Fed expressed optimism about the labor market, stating,
“The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid.”
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