President Donald Trump on Friday called on Federal Reserve Chairman Jerome Powell to lower interest rates by a full percentage point.
“‘Too Late’ at the Fed is a disaster!” Trump wrote in a post on Truth Social. “Europe has had 10 rate cuts, we have had none. Despite him, our Country is doing great. Go for a full point, Rocket Fuel!”
Trump’s post came after the release of the Labor Department’s May employment report, which showed the U.S. economy added 139,000 jobs in the month. The figure was stronger than the estimate of economists polled by LSEG, who projected a gain of 130,000 jobs, but cooler than the downwardly revised increase of 147,000 jobs added in April.
JOB GROWTH CONTINUED TO SLOW IN MAY AMID ECONOMIC UNCERTAINTY
The president’s comments also follow the European Central Bank’s (ECB) decision to cut interest rates on Thursday.
The ECB has now lowered borrowing costs eight times, or by 2 percentage points, since last June, seeking to prop up a eurozone economy that was struggling even before erratic U.S. economic and trade policies dealt it further blows.
With inflation now safely in line with its 2% target and the cut well-flagged, the focus has shifted to the ECB’s message about the path ahead, especially since at 2%, rates are now in the “neutral” range where they neither stimulate nor slow growth.
ECB CUTS RATES AS BETS BUILD ON A SUMMER PAUSE
The president, in a separate Truth Social post on Friday, said cutting interest rates would allow the U.S. to reduce short- and long-term interest rates on debt that is “coming due.”
“If ‘Too Late’ at the Fed would CUT, we would greatly reduce interest rates, long and short, on debt that is coming due,” Trump wrote. “Biden went mostly short term. There is virtually no inflation (anymore), but if it should come back, RAISE “RATE” TO COUNTER. Very Simple!!! He is costing our Country a fortune. Borrowing costs should be MUCH LOWER!!!”
The market currently expects a near-zero chance of a rate cut after the Fed’s next meeting on June 17-18, according to the CME FedWatch tool.
Trump most recently demanded Powell to lower interest rates on Wednesday, after ADP reported companies in the private sector added just 37,000 jobs in May. The figure was the lowest since March 2023.
Reuters contributed to this report.
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