Trump urges Federal Reserve to cut interest rates by 3 percentage points, citing housing market and government savings.

US President Donald Trump urged the Federal Reserve to cut interest rates by three percentage points, citing benefits for the housing market and federal government interest payments. Trump toured the Federal Reserve building construction site, criticizing cost overruns and potentially laying groundwork for firing Fed Chair Jerome Powell. However, Trump did not back off from his insistence on lower interest rates, saying they are holding back economic progress.

US President Donald Trump visited the Federal Reserve's headquarters on Thursday, July 24, 2025, to urge the central bank to cut interest rates by three percentage points. The visit came less than a week before the Fed's next rate-setting meeting, where policymakers are expected to leave the benchmark interest rate in the 4.25%-4.50% range [1].

During the visit, Trump criticized the Fed's renovation project, which has a current estimated cost of $3.1 billion. He alleged that the project's costs were out of control and suggested that the Fed was mismanaging the project [2]. Trump also reiterated his desire for lower interest rates, stating that they are holding back economic progress.

Despite his criticism of the renovation costs, Trump did not back off from his insistence on lower interest rates. He said, "I'd love him to lower interest rates," referring to Federal Reserve Chair Jerome Powell. Trump also stated that he would not fire Powell, despite previously suggesting that he might do so [1].

The visit to the Fed's construction site was part of Trump's ongoing campaign to pressure the central bank to cut interest rates. The president has repeatedly demanded that Powell slash US interest rates and has frequently raised the possibility of firing him [1].

The market reaction to Trump's visit was subdued. The yield on benchmark 10-year Treasury bonds ticked higher after data showed new jobless claims dropped in the most recent week, signaling a stable labor market not in need of support from a Fed rate cut. Stocks on Wall Street were mixed [1].

Trump's criticism of Powell and flirtation with firing him have previously upset financial markets and threatened a key underpinning of the global financial system - that central banks are independent and free from political meddling [1].

References:
[1] Reuters. (2025, July 24). Trump visits Fed headquarters, says he will not fire Powell. Retrieved from https://www.reuters.com/world/us/trump-visits-fed-headquarters-says-he-will-not-fire-powell-2025-07-24/
[2] The Guardian. (2025, July 24). Fed chair pushes back on Trump criticism of renovation costs as president presses central bank to cut interest rates. Retrieved from https://www.theguardian.com/business/2025/jul/24/trump-jerome-powell-federal-reserve