Catenaa, Friday, June 06, 2025- US President Donald Trump on Friday urged Federal Reserve Chair Jerome Powell to cut interest rates by a full percentage point to boost the economy.
“Europe has had 10 rate cuts, we have had none. Despite (Powell), our Country is doing great. Go for a full point,” Trump wrote in Truth Social on Friday.
Markets predict there is virtually zero chance of any rate decrease, let alone a full-percentage-point cut, following the Federal Open Market Committee’s next meeting later this month.
Central banks typically limit rate moves to quarter-point changes, and Trump said the Fed could always raise rates again if cuts led to inflation.
The president has repeatedly berated Powell for not cutting rates as he desires. The two men met face-to-face for the first time last week, with Trump telling Powell he was making a “mistake” by not lowering rates.
The ECB eased on the notion that both inflation and economic growth were weakening. However, Fed policymakers worry that Trump’s tariffs could cause a spike in inflation.
In a follow-up message, Trump argued that the cuts would enable the US to lower both long- and short-term rates “on debt that is coming due.”
The president added that even if inflation should flare back up, Powell could just ratchet rates higher in response.
“Very Simple!!! He is costing our Country a fortune,” Trump wrote of Powell. “Borrowing costs should be MUCH LOWER!!!”
The Fed in May left the policy rate in the 4.25%-4.50% range, where it has been since December, and policymakers have since signalled they may leave it there for another few months as they wait for more clarity on Trump’s tariff policy.
The Fed cut rates by one full point in total over President Joe Biden’s final year in office. Those cuts came after a series of rate hikes in 2022 and 2023 in response to inflation spurred by the COVID-19 pandemic and other factors.
