Donald Trump criticized the Federal Reserve's recent decision to cut its benchmark interest rate by half a percentage point, calling it a “political maneuver” and suggesting that a smaller reduction would have been more appropriate.
In an interview with Newsmax, Trump remarked, “It really is a political move. Most people thought it was going to be half of that number, which probably would have been the right thing to do. So it’s a political move to try and keep somebody in office, but it’s not gonna work, because the inflation has been so bad.”
He went on to express discontent with Fed Chairman Jerome Powell, claiming he “missed the inflation” indicators. “They missed it. They missed the number. They’re either too early or too late. Now they’re too early. Before they were too late. But inflation is already done,” Trump added.
This half-point cut marks the Federal Reserve’s first reduction in over four years, following a lengthy period of maintaining rates at their highest levels in two decades.
Trump has often criticized the central bank and argued that presidents should have greater sway over its monetary policy decisions, even as traditional practices aim to keep such choices free from political influence. He also stated he would not reappoint Powell as chairman.
These comments came after President Joe Biden described the rate cut as “an important signal” indicating that inflation is easing. He noted, “Lowering interest rates isn’t a declaration of victory. It’s a declaration of progress, to signal we’ve entered a new phase of our economy and our recovery.”
U.S. recession fears have heightened as two major financial institutions warn of escalating economic risks linked to the current policy environment.
The US Senate has made a pivotal move toward averting a government shutdown by passing a Republican-backed spending bill.
Billionaire investor Marc Lasry has voiced concerns that economic instability under Donald Trump’s policies—particularly tariffs—could discourage investment and increase the likelihood of a recession.
Investor Tom Lee has expressed his belief that the market’s reaction to the Trump administration’s tariffs was overly dramatic.