Trump's Rate Demands Clash with Fed's Data-Driven Dilemma

President Donald Trump renewed his criticism of Federal Reserve Chair Jerome Powell on Thursday, calling for immediate rate cuts as the central bank prepares to announce its latest policy decision. The remarks, made during a speech in South Korea at the APEC summit, underscored the growing tension between the administration and the Fed amid an ongoing government shutdown that has delayed critical economic data. "We're not going to have a Fed that's going to raise interest rates because they're worried about inflation in three years from now," Trump said, a comment that drew laughter from the audience, according to a a Yahoo Finance report.

The Fed is widely expected to cut interest rates by 25 basis points at its October 28–29 meeting, bringing the target rate down to 3.75–4.00%, according to a Morningstar preview. Analysts attribute the decision to a weakening labor market and persistent inflation concerns, despite the shutdown complicating data collection. Bank of America analysts noted that the job market "is at best holding steady and at worst slightly deteriorating" due to delayed reports, according to a Yahoo Finance roundup. With a 97.6% probability priced into the market for a December cut, that same Yahoo piece said the Fed faces pressure to act decisively.

The administration's trade agenda also took center stage as Trump highlighted a scheduled meeting with Chinese President Xi Jinping to address ongoing trade tensions. The encounter, set for Thursday during the APEC summit, comes after China restricted rare earth mineral exports, prompting U.S. efforts to build domestic supply chains, a point highlighted in that Yahoo Finance roundup. Trump also hinted at potential reductions in tariffs linked to fentanyl precursor chemicals, provided China commits to curbing their production, according to an FXStreet report.

Meanwhile, the Senate passed a bipartisan bill to terminate Trump's 50% tariffs on Brazilian goods, voting 52–48 to repeal the measures imposed in retaliation for Brazil's prosecution of Jair Bolsonaro, according to a KSL report. Similar efforts to roll back tariffs on Canada and other countries are expected in the coming weeks, reported by an Inkl piece.

Powell, whose term as Fed chair ends in May 2026, has faced relentless scrutiny from Trump, who has accused him of lagging behind European counterparts and harming business sentiment. The Fed's upcoming December meeting will provide further insight into its policy path, with markets pricing an 80% chance of another 25-basis-point cut, according to a moomoo note.

The government shutdown, now in its fourth week, continues to delay key economic indicators, forcing the Fed to rely on private data and surveys to assess the labor market, according to a Daily Sabah report. Former Fed official Joseph Gagnon emphasized the challenge of balancing inflation risks against employment concerns, calling the Fed's task a "blunt tool" in a complex environment.

As Trump's economic agenda clashes with the Fed's independence, the coming months will test the administration's ability to reconcile its policy priorities with market expectations.