US President Donald Trump reiterated his call for the Fed to cut interest rates in a statement he made on the true social platform.
President Trump: “Inflation, gasoline, energy, food and almost everything is falling! The Fed should cut interest rates like in Europe and China. What’s going on with Mr. Dotel Powell?
Trump’s long-standing interest rate cut prospects have returned to the agenda after reaching a 90-day tariff reduction agreement between the US and China. According to the contract, the 145% tariffs imposed on China have fallen by 115%. The development has reinforced expectations that it could ease inflationary pressures and soften trade relations.
Since the day he took office, Trump, which has been pressured by the Fed to lower policy rates, has hinted at rejecting Fed Chairman Jerome Powell when he resisted earlier. Currently, interest rates are 4.25-4.5%. However, Powell has not changed his policy so far despite pressure from the White House.
The Fed’s reluctance to cut interest rates is largely due to uncertainty in the economic outlook. One of the main reasons for this uncertainty was the Trump administration’s tariff policy, particularly on China. Higher tariffs risked pushing consumer prices up by increasing costs for importers and exporters.
However, the latest contracts show that a more moderate dialogue process can be launched with China as well as other trading partners. Experts say temporary tax cuts could add a new dimension to the market as well as the pressure on the Fed’s interest rate policy.
*This is not investment advice.
