Trump Urges Fed to Slash Interest Rates Amid Rising Inflation Concerns
President Donald Trump has called on the US Federal Reserve to lower interest rates, despite official data showing a continued rise in inflation for the fourth consecutive month.
Trump’s request, made just days after announcing a 25% tariff on all steel and aluminum imports, is aimed at complementing his upcoming trade policies and boosting the US economy.
However, the Fed’s response may not align with Trump’s plea, as recent inflation figures indicate a jump to 3% in January, higher than the expected 2.9%. This increase was driven by rising costs in groceries, fuel, and used cars.
Federal Reserve Chairman Jerome Powell addressed the situation on Tuesday, noting that the central bank is in no rush to reduce interest rates.
Following the inflation report, traders pushed back their expectations for rate cuts, with money markets now forecasting a potential reduction no earlier than December.
The latest CPI data triggered a market reaction, with US stocks falling at the opening bell. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite each dropped by approximately 1%.
Additionally, the cost of US government borrowing rose, with the 10-year Treasury yield climbing to 4.63%. The data also strengthened the US dollar, pushing the pound down 0.4% to below $1.24.
As inflation pressures persist, the clash between Trump’s call for lower borrowing costs and the Fed’s cautious stance could set the stage for a tense economic debate in the months ahead.
