United States President Donald Trump, in a statement he made on the Truth Social platform, reiterated his call for the FED to cut interest rates.
President Trump: “No inflation, gasoline, energy, groceries and almost everything is down! The Fed should lower interest rates like Europe and China. What’s going on with ‘Mr. Too Late Powell’? This is unfair at a time when America is ready to blossom!”
Trump’s long-desired interest rate cut prospects have been back on the agenda with the 90-day tariff reduction agreement reached between the US and China. According to the agreement, the 145 percent tariff imposed on China has been reduced by 115 percent. This development has strengthened expectations that inflationary pressures may ease and trade relations may soften.
Trump, who has been pressuring the Fed to lower its policy rate since the day he took office, had previously hinted at dismissing Fed Chair Jerome Powell when he resisted. Interest rates are currently between 4.25 and 4.5 percent. However, Powell has not changed policy so far despite pressure from the White House.
The Fed’s hesitation to cut interest rates largely stems from uncertainties in the economic outlook. One of the main reasons for this uncertainty was the Trump administration’s tariff policy, particularly against China. Higher tariffs risked pushing up consumer prices by increasing costs for importers and exporters.
However, the latest agreement indicates that a more moderate dialogue process could be initiated not only with China but also with other trading partners. According to experts, the temporary tax cut could add a new dimension not only to markets but also to the pressure on the Fed’s interest rate policy.
*This is not investment advice.
