Donald Trump wants interest rates cut by full point. Will Fed Chair Jerome Powell follow President's order before September?

Time of India

2 days ago

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US President Donald Trump on Friday called on the Federal Reserve to cut interest rates by a full point. Trump has been pressing for Fed rate cuts by pressurizing on Fed Chair Jerome Powell. However, a few Federal Reserve policymakers have claimed that they believe higher inflation is for now a more pressing risk than a slowing labor market, a view that implies support for keeping monetary policy on hold for longer."Too Late' at the Fed is a disaster! Europe has had 10 rate cuts, we have had none. Despite him, our Country is doing great. Go for a full point, Rocket Fuel!" Trump said in a post on Truth Social.Fed policymakers are heading into a communications blackout period in the runup to their June 17-18 meeting, at which they are widely expected to leave the policy rate in its current 4.25 per cent to 4.50 per cent range.Earlier in May, The Fed left the policy rate in the 4.25 per cent-4.50 per cent range, where it has been since December, and policymakers have since signaled they may leave it there for another few months as they wait for more clarity on tariff policy.Policymakers were worried the tariffs and policy uncertainty could slow the economy, but even more so are concerned that they could lead to persistently higher inflation, minutes from the Fed's May meeting released showed. Financial markets currently are pricing in a Fed interest-rate cut in September, with a second one to follow in December.Meanwhile, traders of futures that settle to the Federal Reserve's policy rate continued to bet on Friday that the U.S. central bank will cut its target for short-term borrowing costs in September, after inflation by the Fed's targeted measure cooled to 2.1 per cent in April.The Personal Consumption Expenditure price index rose 2.3 per cent in March, and the Fed targets 2 inflation. Traders also kept bets on a second Fed rate cut in December.Last week, White House spokeswoman Karoline Leavitt said, "the President did say that he believes the Fed chair is making a mistake by not lowering interest rates, which is putting us at an economic disadvantage to China and other countries."A1. Chair of the Federal Reserve of the United States is Jerome Powell.A2. President of USA is Donald Trump.