Trump Urges Fed to Cut Interest Rates as Tariffs Take Effect

Former U.S. President Donald Trump has called on the Federal Reserve to lower interest rates, arguing that it would be beneficial as newly imposed U.S. tariffs begin to impact the economy. His remarks came on Wednesday (19), the same day the central bank decided to keep its benchmark rate unchanged.

Trump’s Statement on Truth Social

Trump made the statement in a post on his social media platform, Truth Social, reinforcing his stance that a rate cut would help the economy navigate the effects of his trade policies. The comment highlights his continued influence on economic debates, especially as tariffs remain a central theme in U.S. trade strategy.

Federal Reserve’s Perspective

Earlier on the same day, Federal Reserve Chair Jerome Powell acknowledged that the initial trade policies under Trump’s administration, including import tariffs, had contributed to slower economic growth and, at least temporarily, higher inflation. Despite these concerns, the Fed opted to maintain interest rates at their current level, signaling caution in response to economic uncertainties.

Impact on the U.S. Economy

Trump’s call for rate cuts reflects his broader economic strategy, which often ties monetary policy to trade decisions. If the Fed eventually lowers rates, it could ease borrowing costs and stimulate investment, potentially counteracting some negative effects of tariffs. However, Powell and other Fed officials have emphasized the importance of data-driven decisions, focusing on inflation trends and overall economic stability.

As the debate over tariffs and monetary policy continues, financial markets and global trade partners will closely watch how the Fed navigates these challenges in the coming months.