Trump tells Fed to ‘do the right thing’

Echoing the sentiment of many economists and executives, Fed Chair Jerome Powell said the level of uncertainty right now is “remarkably high.” He added, “I think we’re not going to be in any hurry to move.”AP file/Richard Drew

President Donald Trump is again going after the Federal Reserve — America’s central bank — an institution meant to be independent of politics.

“The Fed would be MUCH better off CUTTING RATES as U.S. Tariffs start to transition (ease!) their way into the economy. Do the right thing. April 2nd is Liberation Day in America!!!” Trump posted on social media hours after the Federal Reserve announced it would not lower interest rates for the time being.

The Fed, which announced it wasn’t cutting rates at its Wednesday meeting, doesn’t meet again until early May, more than a month after Trump’s reciprocal tariffs on trading partners across the globe.

The Fed’s restrictive policy has been a thorn in Trump’s side since he took office. Three days into his second term, he told reporters, “I think I know interest rates much better than they do.”

Presidents have no direct control of interest rates, but Trump’s plan has been that his energy policies will lower the cost of oil, bringing down overall inflation, thus giving the Fed room to cut rates. On the campaign trail, Trump promised voters he would slash energy costs in half within 12 months.

Instead, progress on inflation has stalled, Powell said, particularly goods inflation. Usually one to avoid commenting on fiscal policy, tariffs have already become so entrenched in the Fed’s data that he seemed to have no choice but to explain their impact.

“Inflation was running around 2.5% for some time. I do think with the arrival of the tariff inflation, further progress may be delayed,” Powell said. As history has shown, when the Fed lowers rates too soon, inflation only gets worse. After being criticized for waiting too long to raise rates after pandemic-era policies stimulated the economy, central bankers are wary of getting their timing wrong twice.

Currently, the Fed is expected to make two quarter-point cuts in 2025. There’s no guarantee one will occur at their next meeting, or that the forecast will hold.

“I’m confident that we’re well-positioned in the sense that we’re well-positioned to move in the direction we’ll need to move. I mean I, I don’t know anyone who has a lot of confidence in their forecast,” Powell said.

Echoing the sentiment of many economists and executives, Powell said the level of uncertainty right now is “remarkably high.”

“I think we’re not going to be in any hurry to move,” Powell said. “And as I mentioned, I think we’re well-positioned to wait for further clarity. And not in any hurry.”

Have a news tip? Contact Ahtra Elnashar at [e-mail].