President Donald Trump renewed his call Monday for a large interest rate cut, furthering pressure on the independent US central bank a day before it opens a key policy meeting.
In a post to his Truth Social platform, Trump said that Federal Reserve Chair Jerome Powell “must cut interest rates, now, and bigger than he had in mind.”
He also referred to Powell as “too late” in lowering rates, a monicker the president has repeatedly used in recent times.
The Fed is widely anticipated to slash the benchmark lending rate by 25 basis points at the end of its two-day meeting on Wednesday, and all eyes are on Powell’s comments after the gathering.
The move to lower rates would likely boost the world’s biggest economy at a time when its jobs market is weakening, fueling fears of a downturn.
This would be the first rate cut of 2025, as the Fed has held interest rates steady since its last reduction in December while officials monitored the effects of Trump’s wide-ranging tariffs on inflation.
While inflation remains notably above the central bank’s longer-run two-percent goal, the hit from tariffs appear limited for now.
This gives policymakers some room to pivot to shoring up the labor market, as they walk a tightrope between maintaining stable prices and maximum employment.
Political pressure also clouds the bank’s meeting with Stephen Miran, who chairs the White House Council of Economic Advisers, potentially confirmed as a Fed governor just hours before the meeting is due to begin.
The US Senate is due to vote to advance his nomination on Monday.
