Trump Urges Fed to Cut Rates by a Full Percentage Point, Puts Pressure on Powell

US President Donald Trump has urged the Federal Reserve to cut interest rates by a full percentage point, intensifying pressure on Chair Jerome Powell. Trump has regularly complained that the Fed has been too reluctant to cut borrowing costs. Fed officials are scheduled to meet on June 17-18 and are expected to leave rates unchanged. Lowering rates too quickly could stoke inflationary pressures.

US President Donald Trump has intensified his pressure on the Federal Reserve, urging Chair Jerome Powell to slash interest rates by a full percentage point. This comes despite a better-than-expected jobs report, which showed U.S. hiring rose more than predicted in May [1].

Trump has long argued that the Fed has been too slow to lower borrowing costs, pointing to repeated interest rate cuts in Europe. He has repeatedly criticized Powell, suggesting that the current rates are harming the U.S. economy [2]. The Fed last lowered rates by a full point during President Joe Biden's final year in office, and the last time it made a single rate cut of that amount was during the start of the Covid-19 pandemic in March 2020 [1].

The Fed is scheduled to meet on June 17-18, and market experts expect the central bank to leave rates unchanged. Lowering rates too quickly could stoke inflationary pressures, which the Fed has been cautious about given the current economic conditions [3]. Trump's latest demand follows the release of the Labor Department's May employment report, which showed the U.S. economy added 139,000 jobs, exceeding expectations [4].

Trump's call for a full percentage point cut comes as the European Central Bank (ECB) has lowered its benchmark rate eight times since last June, seeking to prop up a eurozone economy struggling due to erratic U.S. economic and trade policies [2]. The ECB has now paused its rate cuts, indicating that inflation is safely in line with its 2% target, and rates are now in the "neutral" range [2].

Market experts have warned against making 'knee-jerk reactions' amid trade tensions, advising clients and investors to stay informed and patient [2]. The market currently expects a near-zero chance of a rate cut after the Fed's next meeting [3].

References:
[1] https://www.cnbc.com/2025/06/06/trump-powell-fed-rates.html
[2] https://www.foxbusiness.com/economy/trump-urges-feds-powell-cut-interest-rates-full-percentage-point-rocket-fuel
[3] https://www.usatoday.com/story/money/economy/2025/06/06/trump-federal-reserve-interest-rates-full-point/84073828007/
[4] https://www.cnbc.com/2025/06/04/trump-powell-adp-jobs.html