He wants a rate slash.
Former President Donald Trump has once again called on Federal Reserve Chair Jerome Powell to implement a significant interest rate cut, urging a full percentage point reduction despite the release of strong U.S. employment data. Trump’s comments, made via a Truth Social post, came shortly after the Labor Department announced job growth in May exceeded forecasts, signaling continued economic strength.
In his message, Trump maintained that the economy remains robust, but claimed that such a substantial rate cut would act as “rocket fuel” to further accelerate growth. Despite his enthusiasm, financial markets are predicting almost no chance of a rate cut—let alone a full point decrease—during the upcoming Federal Reserve meeting later this month. The Fed last enacted such a large single cut in March 2020 at the start of the COVID-19 crisis.
The May employment report showed nonfarm payrolls increased by 139,000, surpassing the anticipated 125,000. These stronger-than-expected numbers have reduced the likelihood of near-term interest rate reductions. Trump argued that, while other central banks, such as the European Central Bank, are actively lowering rates, the Fed has remained inactive, which he believes is costing the U.S. money. The ECB recently cut its key rate for the eighth time since June 2023.
Trump contended that a rate cut would help reduce borrowing costs on both short- and long-term government debt and suggested that if inflation resurges, the Fed could raise rates again. He sharply criticized Powell, blaming him for missed opportunities and alleging that the central bank’s inaction is harming the nation financially.
Prior to the release of the jobs report, traders had expected a rate cut as early as September, with a 74% probability. However, the report’s stronger wage growth and job numbers caused that expectation to drop to 62%. The likelihood of multiple cuts by the end of 2025 has also fallen, with market data showing just a 22% chance of more than two rate reductions.
