U.S. President Donald Trump spoke on February 11, 2025 at the Oval Office of the White House in Washington, DC.
Kevin Lamarque | Reuters
President Donald Trump has once again changed the Fed’s position and stated in a social media post Wednesday that interest rates need to drop.
“The interest rate should be lowered, which will go hand in hand with the upcoming tariffs!!! Let rock, America!!” said the president in a morning post about the Truth Society.
The comments were made the day after Fed Chairman Jerome Powell said. Decision makers don’t need to be “rush” Lower interest rates while paying attention to inflation progress. Other officials said they are also evaluating the potential impact of tariffs on prices, although Powell directly avoids commenting on the issue.
Trump’s post also reflects the White House’s narrative on monetary policy.
Shortly after taking office, Trump demanded a “immediate” reduction in interest rates, although he had no direct power over the Fed. A few days later, he said the Fed made the right decision at its meeting in late January.
Treasury Secretary Scott Bessent said in subsequent comments that the government is more focused on lowering the 10-year Treasury yield than short-term Fed fund rates.
But Trump’s Wednesday comments suggest that pressure on central banks to alleviate policies has been restored.
Market pricing means the Fed will continue until June or July, and then no longer cuts for the rest of the year. Some economists, including Bank of America economists, believe that central banks will not relax at all this year after they drop the benchmark overnight borrowing rate by a full percentage point in 2024.
