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Donald Trump has called for a huge reduction in US interest rates and asked whether he can “appoint myself” at the Federal Reserve, just hours before the central bank is due to release its latest policy decision.
“We should be two points lower, it would be nice to be two-and-a-half points lower,” the US president said at the White House on Wednesday morning. Trump added: “Am I allowed to appoint myself at the Fed? I’d do a much better job than these people.”
The latest salvo against the Fed and its chief Jay Powell, who he on Wednesday called “stupid”, comes as policymakers were widely expected to hold interest rates steady at the end of their two-day meeting. The Fed cut rates by 1 percentage point last year, but has held rates steady in 2025 as they assess how Trump’s tariffs will affect inflation and growth.
The US president has said that he will not fire Powell, whose term ends next May. The Supreme Court has signalled that it believes the executive branch does not have the legal right to fire Fed governors.
Fed officials will later on Wednesday publish their latest forecasts for US growth, inflation, employment and interest rates in the coming years. They are widely expected to downgrade their quarterly projections for growth and inflation.
In March, the median expectation was for the US economy to expand by 1.7 per cent this year, unemployment to rise to 4.4 per cent and PCE inflation to hit 2.7 per cent.
Fed officials have indicated that the news on US tariffs since then has meant that growth and employment will be lower and inflation, higher, than they thought at the start of this year.
In March, rate-setters anticipated cutting borrowing costs by a quarter point twice this year. Economists expect the Fed may well stick with those expectations, though there is a chance that the forecast for cuts could be cut to just one this year.
Trump has repeatedly called on the Fed to cut borrowing costs, labelling Powell “Mr. Too Late” and a “numbskull”.
