Trump wants ‘jerk’ Powell to cut interest rates after latest inflation data

The president Donald Trump On Tuesday, he pointed to the release of new inflation data since December that showed inflation had slowed, saying the trend supported his calls for the Federal Reserve to cut interest rates.

The Bureau of Labor Statistics released the consumer price index (CPI) for December, which showed that inflation was up 2.7% from a year earlier, while the core CPI, which excludes variable food and energy prices, came in at 2.6%. Headline inflation was in line with the expectations of economists polled by LSEG, while core inflation was slightly below the average of 2.7%.

While those inflation numbers are still above the Fed’s 2% long-term inflation target, the president said he thinks inflation is low enough to justify an interest rate cut and repeated his calls to the Fed Chair. Jerome Powell to lower prices.

“We have very low inflation. That will give ‘Powell too late’ an opportunity to give us a big rate cut,” Trump told reporters before leaving Washington for an economic event in Detroit.

INFLATION UNSTABLE IN DECEMBER, STAYING WELL ABOVE FED’S 2% TARGET

During a speech in Detroit, Trump said mortgage rates were falling and “that’s not with the help of the Fed.”

“If I had the Fed’s help, it would be easier, but that will pass soon,” Trump said of Powell. Later he added that “when the market goes up, they should reduce the prices.”

Earlier in the day, Trump said in a Truth Social post: “Great (LOW!) Inflation numbers for the USA. That means Jerome ‘Too Late’ Powell has to cut interest rates, FOR SURE!!! If he doesn’t he’ll keep saying, ‘TOO LATE!'”

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The president’s call for interest rate cuts and his continued criticism of Powell, who has served as Fed chairman since 2018 following his appointment by Trump, come as the Justice Department pursues a criminal investigation into whether Powell lied to Congress. Renovation of Federal Reserve headquarters.

Powell revealed that the Fed was served with subpoenas related to a criminal investigation by federal prosecutors on Friday, in a video statement on Sunday that the investigation into the stimulus project and his congressional testimony were “pretexts” to pressure the Fed to cut interest rates.

“The threat of criminal charges is the result of this The Federal Reserve to set interest rates based on our best assessment of what will serve the public, rather than following the President’s preferences, “said Powell. “This is about whether the Fed will be able to continue to set rates based on evidence and economic conditions – or rather monetary policy will be guided by political pressure or intimidation.”

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Federal Reserve Chairman Jerome Powell said the DOJ investigation is a pretext to pressure the Fed to lower interest rates. (Amanda Andrade-Rhoades/Reuters)

Inflation has remained above the Fed’s 2% target for nearly five years, as monthly CPI readings with headline inflation below that threshold began in February 2021.

Price growth reached 9.1% in June 2022 but has been close to target for the past few years. In 2025, inflation eased to 2.3% in April – the lowest rate in four years – before rising again to 3% in September as businesses pass on higher costs from the president’s spending on consumers.

The latest CPI inflation The report shows that inflation remains above the Fed’s 2% target, and the market does not expect policymakers to comply with the president’s calls for rate cuts at their next meeting.

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The CME FedWatch tool shows a 97.2% probability that the Fed will leave rates unchanged in the current target range of 3.5% to 3.75%. That number increased from 95.6% yesterday and 82.3% last week.