Trump Steps Up Calls for 'Big' Interest Rate Cut
(MENAFN) Following an unexpected decline in August's producer inflation data, U.S. President Donald Trump asserted on Wednesday that the nation faces "No Inflation," intensifying his demand for the Federal Reserve to implement a significant interest rate reduction.
"Just out: No Inflation!!! 'Too Late' must lower the RATE, BIG, right now," Trump declared on his social media platform, Truth Social. He further directed harsh criticism at the central bank's leader, adding, "Powell is a total disaster, who doesn’t have a clue!!!"
The sharp rebuke came as the U.S. Producer Price Index (PPI) unexpectedly dropped by 0.1% from July to August, defying projections for a 0.3% increase. The year-over-year PPI stood at 2.6%, falling short of the anticipated 3.3% rise. This data, which often foreshadows consumer price trends, precedes the highly anticipated consumer inflation report set for release on Thursday. The Federal Reserve's monetary policy decisions, with the current federal funds rate target between 4.25% and 4.5%, are guided by two key mandates, one of which is inflation.
Tensions between Trump and Fed Chair Jerome Powell have been ongoing, with the former president frequently urging the central bank to align with European counterparts and cut rates to prevent a potential economic slowdown. Despite this persistent political pressure, the Fed has maintained a consistent interest rate over its last five meetings. Analysts widely expect the Federal Open Market Committee to approve a 25 basis point rate cut at its upcoming meeting on September 16-17, largely in response to a softening job market.
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