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Trump Calls for Major Interest Rate Cuts Amid Fed's Steady Rates

Former President Trump urges the Federal Reserve to implement significant interest rate cuts, criticizing current rates and comparing them to European policies.

Overview

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  • Trump advocates for a drastic reduction in interest rates, suggesting the equivalent of 10 cuts by the Federal Reserve.
  • The Federal Open Market Committee has recently decided to maintain interest rates between 4.25% and 4.5%.
  • Trump points out that Europe has benefited from 10 rate cuts, while the U.S. has not seen similar reductions.
  • He criticizes Fed Chair Jerome Powell for steady rates, claiming it costs the U.S. 'hundreds of billions of dollars'.
  • Trump believes the prime interest rate should be 2.5 points lower to better support the economy.

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"…Trump's criticisms of Powell reflect his frustration with the Fed's decision to maintain interest rates, which he believes is detrimental to the economy."

Trump rips Jerome Powell after Fed holds interest rates steady
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FAQ

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The Federal Reserve has maintained the target range for the federal funds rate at 4.25% to 4.5% as of their June 2025 meeting.

Trump criticizes the Federal Reserve for keeping rates steady, contrasting with Europe which he says has benefited from about 10 rate cuts, and claims the current rates cost the U.S. hundreds of billions of dollars. He advocates lowering the prime interest rate by 2.5 points to better support the U.S. economy.

The Federal Reserve projects the inflation rate to move to 3% in 2025, higher than earlier forecasts, and foresees unemployment rising to around 4.5%, signaling concerns about stagflation in the economy.

The Fed has adopted a cautious wait-and-see approach, holding interest rates steady amid uncertainties caused by President Trump's tariff policies and mixed economic indicators like rising inflation and slowing job creation.

The FOMC projects the likelihood of two more interest rate cuts totaling half a percentage point during the rest of 2025, maintaining a cautious stance given economic uncertainties.

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