President Donald Trump says Fed Chair Powell should cut interest rates and ‘stop playing politics’

President Donald Trump on Friday called for Federal Reserve Chair Jerome Powell to cut interest rates, even as his tariff blitz roiled markets and raised fears of a rebound in inflation.

“This would be a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates. He is always ‘late,’ but he could now change his image, and quickly,” Trump said in a post on Truth Social. “Energy prices are down, Interest Rates are down, Inflation is down, even Eggs are down 69%, and Jobs are UP, all within two months – A BIG WIN for America. CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!”

Trump’s post comes as global equity markets are selling off sharply. The president’s new tariff policy, unveiled on Wednesday, has raised concerns about a global economic slowdown.

The new trade policies may also be a barrier that keep the Federal Reserve from cutting. The central bank has paused its rate cuts in recent meetings, in part because progress on reducing inflation appeared to have plateaued. The new tariffs could lead to a widespread rise in prices, at least temporarily, that further complicates the inflation picture.

On Friday, Powell told business journalists in Arlington, Va., that the Fed was “well positioned to wait for greater clarity” before making changes like rate cuts. He also said that the tariffs announced were “significantly larger than expected.”

Market-based interest rates have already fallen sharply this week, with the 10-year U.S. Treasury yield now below 4%. Treasury yields often fall when investors are worried about a potential recession.

Movement in the Fed funds futures market implies that traders now expect at least four rate cuts of 0.25 percentage points from the central bank this year, according to the CME’s FedWatch tool. At a meeting last month, central bankers projected just two rate cuts.

Trump has downplayed concerns about this week’s market volatility, at one point comparing the reaction to a patient who undergoes a surgery.

When asked about those comments Friday, Powell said, “I make it a practice not to respond to any elected officials comments, so I don’t want to be seen to be doing that. It’s just not appropriate for me.”

Trump regularly commented on central bank policy during his first term as president and was often at odds with Powell. That has led to speculation that he might look to remove the Fed Chair before his term ends next year. Trump said in December that he does not intend to fire Powell, and the Fed Chair has said he doesn’t think the president is legally allowed to do so.

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