Early Thursday morning Beijing time, the Federal Reserve announced a 25 basis point interest rate cut as expected, lowering the target range for the federal funds rate to 3.50%-3.75%. This is the Fed's third rate cut this year, and the third consecutive rate cut since September. The total rate cuts this year have now reached 75 basis points.
However, shortly after the Federal Reserve released its interest rate decision, it was criticized by US President Trump, who argued that the rate cut was insufficient. He pointed out that the 25-basis-point cut was "a rather small number that could have been doubled—at least doubled." Since taking office, Trump has been urging the Federal Reserve to cut rates significantly to stimulate further economic growth.
In addition, he reiterated his long-standing criticism of Federal Reserve Chairman Jerome Powell , calling him "a rigid man" and saying the rate cuts were "quite small."
Earlier, at the post-meeting press conference, Powell pointed out that the recent rate cut was a "lucky break," giving the Federal Reserve room to "wait and see how the economy develops." He also directly blamed Trump's tariffs for causing "somewhat high" inflation in the United States.
“These figures are higher than earlier this year because rising commodity inflation reflects the impact of tariffs,” Powell said.
That same day, at a roundtable meeting with CEOs at the White House, Trump also stated that he planned to meet with former Federal Reserve Governor Kevin Warsh later Wednesday. Warsh, along with White House National Economic Council Director Kevin Hassett, are considered two of the leading candidates to succeed Powell.
“I’m looking for someone who’s honest about interest rates. Our interest rates should be much lower,” he said.
Since the start of his second term, Trump's "war" with Powell has never ceased, with Trump repeatedly threatening to fire Powell. Shortly before this policy decision was announced, Trump stated that he had decided who would succeed Powell and would announce the nomination early next year. Powell's term as Federal Reserve Chairman will end on May 15, 2026, and his term as a governor will end on January 31, 2028.
Faced with Trump's attacks and threats of dismissal, Powell has repeatedly stated that he will not resign and will remain in his post until the end of his term.
Furthermore, Trump also pointed out that he regretted the trend of raising interest rates despite strong economic growth. Previously, Powell stated that no one currently considers interest rate hikes as a basic expectation.
“We need to go back to the past. Our announcement of significant progress does not mean we are going to raise interest rates in an attempt to stifle it,” he said.
(Article source: CLS)
