Fed Rate Cuts Sought by Trump Amid Tariff Agenda
President Donald Trump has urged the Federal Reserve to lower interest rates, intensifying pressure on the central bank as he embarks on an economic plan focused on tariffs and tax incentives.
Trump tweeted Wednesday, "Interest Rates should be lowered, something which would go hand in hand with upcoming Tariffs." His remarks precede Fed Chair Jerome Powell's testimony before the House Financial Services Committee.
Powell indicated Tuesday that the Fed would be cautious in adjusting rates, signaling a wait-and-see approach. The Federal Open Market Committee has reduced rates thrice in 2024, but kept them steady in January.
Trump's stance is a departure from his earlier comments, where he suggested the Fed's decision to hold rates was appropriate. Traditionally, presidents avoid influencing the bank's policymaking, but Trump has repeatedly criticized the Fed and Powell on interest rates.
Trump's policy proposals, particularly tariffs on Chinese imports and other goods, have introduced uncertainty into the economic outlook. Despite delaying tariffs on Mexico and Canada, he has threatened reciprocal levies on other countries.
Most economists contend that these measures could heighten inflationary pressures, a primary concern for voters that contributed to Trump's 2024 re-election.