Trump Urges Fed to Lower Interest Rates

US President Donald Trump has reiterated his call on the Fed to lower interest rates, criticizing the central bank’s decision to keep the federal funds rate unchanged between 4.25% and 4.50%.

The Fed’s two-day monetary policy meeting ended without any adjustments to interest rates, prompting Trump to voice his displeasure. He argued that the rate cut was necessary due to the increasing economic impact of U.S. tariffs.

Meanwhile, Fed officials, including Atlanta Fed President Raphael Bostic, signaled a cautious approach, noting uncertainty about the economy’s direction amid growing concerns among households and businesses.

Bostic stated that the Fed’s inflation forecast for this year was largely unchanged and that inflation was not expected to return to its 2% target until 2027. He warned that the path to lower inflation would be variable, describing it as “a very bumpy ride.”

He reiterated that the Fed currently only sees one rate cut this year, despite speculation of multiple cuts in 2025. Bostic addressed tariff concerns, indicating that historically tariffs led to a one-time price spike, but this situation might differ.

While the Fed remains cautious about abrupt policy changes, Bostic emphasized the importance of avoiding premature rate cuts that could necessitate a reversal later. He also assured that the Fed would respond appropriately if economic conditions weaken significantly.

*This is not investment advice.