Mr. Trump: The US should reduce interest rates

“Interest rates should be reduced, in parallel with the upcoming import tax policies,” Mr. Trump wrote on social network Truth Social on February 12.

The comment was given by him a day after the President of the Federal Reserve Department (Fed) said to the US Congress that the agency “did not rush to reduce interest rates”. Other Fed officials also stated that they need to assess the potential impact of import taxes at prices.

During the hearing before the US House of Representatives, Mr. Powell did not mention the president’s desire to reduce interest rates. The head of the Fed only said that “people can believe that we still keep the cold head, do their deeds well and make decisions based on the economic situation.” When asked whether the statements of the country’s leaders were not in what the Fed considered when acting or not, Powell said: “Exactly”.

The relationship between Mr. Trump and the Fed president for many years has not been smooth. The US President regularly criticizes the agency’s policies and has threatened to fired Powell.

President Trump’s post shows the White House once again changing the viewpoint of monetary policy. Immediately after taking office, Mr. Trump asked for interest rates to be “immediately”, but did not directly mention the Fed. A few days later, he said that the Fed made the right decision, when he kept the interest rate at the end of January.

In recent statements, US Finance Secretary Scott Bessent said the government would focus on lowering the yield of 10 -year government bonds, instead of the short -term interest rate that the Fed is running. However, Mr. Trump’s comments put pressure on monetary loosening.

Half an hour after Mr. Trump’s post, the US Labor Statistics Office published the country’s consumer price index (CPI) in January more stronger than expected. Accordingly, the US CPI in January increased by 3% compared to the same period last year and the core CPI (excluding fuel and food prices) by 3.3%. This data strengthens the Fed forecasting the interest rate in the March meeting and can wait until at least September to reduce interest.

Last year, the Fed reduced interest rates for 3 consecutive times from the September September session, bringing the reference to 4.25-4.5%. However, the agency kept the interest rate in the January meeting. Powell then said it would only loosen the monetary policy if the labor market suddenly weakened, or inflation “faster faster than forecast”.