Former President Donald Trump has urged Federal Reserve Chairman Jerome Powell to reduce interest rates as new tariffs disrupt the stock market and heighten concerns about inflation. In a Truth Social post on Friday, Trump called it the “perfect time” to cut rates, emphasizing the need for swift action. This comes as global markets experience turbulence following the rollout of significant tariff measures earlier in the week.
Trump criticized Powell for being “always late” but suggested that he could “quickly change his image” by acting decisively. Highlighting recent economic improvements, Trump noted that energy prices, inflation, and even egg prices have dropped, while job growth remains strong. “Cut interest rates, Jerome, and stop playing politics!” Trump wrote emphatically in an all-caps statement, suggesting immediate intervention is necessary to stabilize the economy.
Despite Trump’s push for aggressive rate cuts, Powell stated in a press conference Friday at the Society for Advancing Business Editing and Writing conference in Arlington, Virginia, that the Federal Reserve would exercise caution. Powell explained that the Fed would wait for “greater clarity” before making any adjustments to its monetary policy, including potential rate reductions, citing the uncertainties created by the tariffs. He added that the new trade policies could lead to slower growth and rising inflation, further complicating the economic landscape.
Earlier this week, Trump introduced a baseline 10% tariff on all imports, along with reciprocal tariffs targeting countries with high tariff rates on U.S. goods. For example, China, which imposes a 67% tariff on American products, now faces a 34% tariff from the U.S., on top of an existing 20% rate. Similarly, the European Union’s 39% tariff rate will see an additional 20% levy. Additionally, a 25% tariff on foreign-made cars went into effect at midnight Thursday.
These tariffs are part of Trump’s strategy to retaliate against what he calls “unfair treatment” by other nations, particularly in trade relations. He argues that the measures will revitalize U.S. industries, create jobs, and boost domestic manufacturing. However, international responses have been harsh. China’s finance ministry condemned the tariffs, calling them a “typical unilateral bullying practice” that threatens global economic stability.
The tariffs have rattled financial markets, with Wall Street experiencing its worst day since 2020 on Thursday. Economic uncertainty, coupled with fears of escalating trade wars, has left investors wary. Meanwhile, some countries have retaliated by increasing tariffs on U.S. exports. China, for instance, imposed an additional 34% duty on American goods, further intensifying the standoff.
Despite mounting criticism and economic jitters, Trump remains firm in his belief that tariffs are a necessary tool to protect U.S. interests. In another all-caps post on Truth Social, he claimed, “This is a great time to get rich, richer than ever before!!!” He also reassured investors that his policies would remain consistent, encouraging them to continue investing in the United States.
As the weekend approaches and baseline tariffs take effect, the Federal Reserve faces increasing pressure to navigate a complex and evolving economic landscape. While Trump pushes for rapid action, Powell’s cautious approach underscores the challenges of balancing growth with long-term stability. The coming weeks will be critical in determining the economic and political fallout of these trade measures.
