President Trump urged the Federal Reserve to cut interest rates ahead of his new tariff implementation, posting on Truth Social that the Fed would be “MUCH better off CUTTING RATES” before his April 2 “Liberation Day” tariff announcement.
Fed Chair Powell acknowledged that Trump’s tariffs will likely increase prices, though he called these effects potentially “transitory” – language previously criticized by Trump allies during the Biden administration.
Despite these inflation concerns, the Fed kept rates steady while maintaining its forecast for two cuts later this year, leading some analysts to suggest the Fed may be underestimating the tariffs’ economic impact.