Deng Tong, Jinse Finance
On June 24, 2025, Trump posted on his social media platform "Truth Social" that "Mr. Too Late" Federal Reserve Chairman Jerome Powell would explain to Congress today why he refuses to lower interest rates. Europe has already lowered rates 10 times, while we have done so zero times. With no inflation and a prosperous economy, we should lower rates by at least 2 to 3 percentage points. This would save the United States $800 billion annually.
Since Trump took office in January, how many times has he urged Powell to lower rates? Why does Trump urge him? Why won't Powell lower rates?
I. How Many Times Has Trump Urged Powell?
- Multiple entries detailing Trump's statements about Powell and interest rates
According to Jinse Finance's statistics, Trump has urged Powell at least 17 times. He repeatedly referred to Powell as "Mr. Too Late" and a "fool", expressing his dissatisfaction with Powell.
II. Why is Trump Eager to Cut Interest Rates?
Offset Tariff Policy Impact: Trump's tariff policy has led to increased import costs, triggering imported inflation, and the US economy faces risks of accelerating inflation and slowing economic growth. He hopes to "offset" the inflation caused by tariff policies through rate cuts to alleviate economic pressure. Fortune reported that Trump wants to lower interest rates to "offset" the inflation from his own tariff policies. The Associated Press believes that Trump's tariff policies have increased the risk of US economic recession, and Trump seems to want to shift the blame to Powell.
Reduce Government Debt Costs: US Treasury data shows that federal debt interest expenditure is massive and continuously growing. In the past eight months, federal debt interest expenditure was approximately $776 billion. Compared to the same period of the previous fiscal year, it increased by 7%, with interest burden already rising to its highest level since the 1990s. Trump believes that Fed rate cuts can lower government debt financing costs, claiming that cutting rates by 2 percentage points could save $600 billion in interest costs annually. However, economists warn that this might backfire. Lowering rates without economic fundamentals could trigger inflation concerns. Reduced demand for US Treasury bonds could further push up bond yields, thereby increasing the government's interest burden.
Stimulate Economic Growth: Rate cuts typically increase market liquidity, stimulate business investment and consumer spending, and promote economic growth. Trump likely believes that the current US economic growth faces certain pressures and hopes to boost the economy through rate cuts to achieve his economic policy goals, such as promoting employment and enhancing corporate competitiveness, which would also help improve his support among voters.
Boost Stock Market Performance: Trump views US stock market performance as a key political achievement. Rate cuts can increase market liquidity, stimulate credit expansion and asset price increases, with the stock market showing a positive short-term outlook, beneficial to voter support.
