President Trump advocates for reduced interest rates, linking them to upcoming tariffs. This statement contradicts previous positions and reflects a shift in the White House's stance on monetary policy. While the Federal Reserve maintains its independent authority, Trump's influence on market sentiment continues to be a factor.
President Donald Trump again switched positions on the Federal Reserve , indicating in a social media post Wednesday that interest rates need to come down.
"Interest Rates should be lowered, something which would go hand in hand with upcoming Tariffs!!! Lets Rock and Roll, America!!!" the president said in a morning post on Truth Social.to lower rates as they watch progress in inflation. Other officials have said they also are evaluating the potential impacts that tariffs will have on prices, though Powell has avoided commenting directly on the issue.
Trump's post also reflects a shifting narrative from the White House when it comes to monetary policy.Shortly after taking office, Trump demanded that interest rates be lowered"immediately," though he has no direct authority over the Fed. Days later, he said the Fed made the correct decision in holding rates steady at its late-January meeting.
In subsequent remarks, Treasury Secretary Scott Bessent said the administration was more focused on lowering the 10-year Treasury yield than the short-term fed funds rate.Market pricing implies the Fed will stay on hold until June or July and then not cut again for the rest of the year. Some economists, including those at Bank of America, think the central bank won't ease at all this year after taking the benchmark overnight borrowing rate down a full percentage point in 2024.
FEDERAL RESERVE INTEREST RATES TARIFFS MONETARY POLICY DONALD TRUMP
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