Trump calls for rate cuts while Fed disagrees

President Trump now came into conflict with the Powell-Federal Reserve over rate cuts.

President Trump and Fed Chair Powell.

On Friday, the president made bold statements on Truth Social with the intent of pushing forth jumbo interest rate cuts, as he had promised many times during his 2024 presidential campaign. "Europe has had 10 rate cuts, we have had none. Despite him [Jerome Powell], our Country is doing great. Go for a full point, Rocket Fuel!," the president stated on his social media platform.

Trump added later today, "[Powell] is costing our Country a fortune. Borrowing costs should be MUCH LOWER!!!"

Trump made comparisons between the American and European fiscal policy of recent, stating that the European Union's efforts to cut rates should be mimicked in the United States. However, the Euro and the U.S. Dollar, and the EU and American economies, are vastly different which require differing fiscal policies. The EU has been more afflicted by a weakening job market and a stagnant currency. The U.S., meanwhile, has a strong currency and a strong job market, as indicated by the May job report which showed an overperformance in the creation of jobs.

The Fed cited this very statistic when announcing their decision to keep rates the way they are. In addition, they have raised concerns that the Trump tariff policy could be greatly inflationary, thus warranting high interest rates to counter the growth of inflation.