President Donald Trump has urged Federal Reserve Chairman Jerome Powell to slash interest rates by a full percentage point, despite a strong jobs report in May that showed U.S. hiring rose more than predicted.
The Bureau of Labor Statistics reported a rise of 139,000 nonfarm payrolls, exceeding Dow Jones estimates for 125,000. Analysts were bracing for a weaker result due to concerns over the impact of Trump’s tariff policies and a potentially slowing economy.
However, Trump pointed to repeated interest rate cuts in Europe as justification for a similar cut in the United States. The Fed has lowered rates by one full point in total during President Joe Biden’s final year in office and last made a single cut of that amount in March 2020.
Trump also argued that lower interest rates would enable the U.S. to reduce long- and short-term debt “on debt that is coming due.” He claimed that if inflation were to flare back up, Powell could increase rates to counter it.
The European Central Bank has already lowered its benchmark rate by a quarter point, its eighth cut since last June. The ECB indicated that this would be its final cut of the year.
Market forecasters give a virtually zero chance of any rate cut in September, let alone a 1 percentage point decrease. Analysts now estimate a 22% chance that the Fed will cut rates more than twice by the end of 2025.
Source: https://www.cnbc.com/2025/06/06/trump-powell-fed-rates.html