As stock markets plunged for the second consecutive day, US President Donald Trump took to Truth Social on Friday, urging Federal Reserve Chair Jerome Powell to cut interest rates immediately.
Calling it a “PERFECT time,” Trump argued that with energy, interest rates, and inflation all falling, and job numbers on the rise, the Fed should act swiftly.
“He is always ‘late,’ but he could now change his image, and quickly… CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!” Trump wrote, citing a dramatic 69% drop in egg prices as a sign of easing inflation.
Tariffs complicate Fed’s path forward
However, Trump’s own economic policies may be complicating the Federal Reserve’s job. The newly announced tariffs—especially the escalating trade war with China—are likely to create a tough dilemma for the central bank. While tariffs can slow economic growth, they also tend to push up prices, potentially triggering stagflation, a mix of stagnant growth and high inflation.
Following the Fed’s March meeting, Powell acknowledged that tariffs are clearly contributing to faster inflation but emphasised the difficulty in quantifying their full economic impact. “We’re not in any hurry to ease,” Powell said, signalling the Fed’s intent to remain cautious amid economic uncertainty.