Trump Slams Fed Chair Powell After Rate Hold, Demands Cuts as $36T Debt Refinancing Looms

Key Points

• Research suggests Trump has called for the equivalent of 10 Fed rate cuts, advocating for a 2.5 percentage point reduction.

• It seems likely that his demand stems from comparing U.S. policy to Europe's 10 rate cuts, aiming to stimulate growth and reduce debt costs.

• The evidence leans toward controversy, with the Fed holding rates steady at 4.25%-4.5%, resisting Trump's pressure.

Background

Donald Trump has been vocal about wanting the Federal Reserve to lower interest rates significantly, criticizing Fed Chair Jerome Powell for not acting. His statements highlight a desire for monetary policy to align more closely with European actions.

Current Situation

The Fed has kept its benchmark rate unchanged for four consecutive meetings, with recent data showing no cuts despite Trump's calls. This has led to tension between Trump and the Fed.

Implications

Lower rates could stimulate economic growth and reduce national debt servicing costs, but the Fed's cautious approach reflects concerns about inflation and economic stability.

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Comprehensive Analysis of Trump's Call for the Equivalent of 10 Fed Rate Cuts

This report provides a detailed examination of Donald Trump's recent calls for the Federal Reserve (Fed) to implement the equivalent of 10 rate cuts, equating to a significant reduction in interest rates by approximately 2.5 percentage points. The analysis synthesizes data from news reports, X posts, and direct statements to offer a thorough understanding of the context, implications, and ongoing controversy surrounding this demand, ensuring a complete picture for stakeholders and observers.

Market and Economic Context

Global economic conditions have been marked by varying monetary policies, with the European Central Bank implementing 10 rate cuts over the past year, as noted by Trump in his criticisms. In contrast, the U.S. Fed has held its benchmark federal funds rate steady at 4.25%-4.5% for the fourth consecutive meeting, as of June 19, 2025. This decision reflects a cautious approach, with nearly half of the Fed's members signaling less scope for cuts this year due to anticipated inflation pressures.

Trump's advocacy for lower rates is rooted in his belief that such actions would stimulate economic growth and significantly reduce the cost of servicing the national debt, which is nearing $36 trillion. He has repeatedly called for the Fed to cut its benchmark interest rates, arguing that the current policy is costing the U.S. "hundreds of billions of dollars."

Trump's Specific Demands and Statements

Recent reports and X posts indicate that Trump has explicitly stated that U.S. interest rates should be 2.5 points lower than the current range. For instance, an X post by @JesseCohenInv on June 18, 2025, highlighted Trump's reiteration that rates should be 2.5 points lower, which aligns with his broader criticism of Fed Chair Jerome Powell. Another X post by @AIStockSavvy on the same day summarized Trump's statements, including a desire for rates to be "two points lower," close to the 2.5-point figure mentioned elsewhere.

Trump's comparison with Europe is particularly notable. In a Fox Business article published on June 19, 2025, he criticized the Fed for not cutting rates, pointing out that Europe had 10 rate cuts while the U.S. had none. This comparison suggests that his call for the equivalent of 10 Fed rate cuts may be partly symbolic, emphasizing the magnitude of policy divergence he perceives.

Additionally, Trump's statements have been inflammatory, calling Powell "truly one of the dumbest, and most destructive, people in Government" and an "American Disgrace!" in the same Fox Business report. These remarks underscore the contentious nature of his demands, with direct quotes such as "Too Late' Jerome Powell is costing our Country Hundreds of Billions of Dollars" and claims of "LOW inflation!" to justify his position.

Fed's Response and Recent Actions

Despite Trump's pressure, the Fed has maintained its stance, with the latest decision on June 18, 2025, leaving rates unchanged. According to a CNBC article published on June 19, 2025, Powell emphasized a "wait and see" approach, citing concerns about inflation and the potential impacts of Trump's policies, including his global trade war. The article also noted Trump's intention to announce his pick for the next Fed chair "very soon," with Powell's term ending in May 2026, adding another layer of uncertainty.

Historical context shows that the Fed did cut rates three times at the end of last year: a 50-basis-point cut in September 2024, followed by two 25-basis-point cuts in November and December 2024, as reported by Fox Business. However, these actions have not satisfied Trump's demands for further and more aggressive rate reductions in 2025.

Detailed Market Impact and Currency Movements

The tension between Trump and the Fed has contributed to market volatility, with investors closely watching for signs of policy shifts. The Fed's steady rates have led to a strengthening U.S. dollar, with the euro declining 0.1% to US$1.1466, as noted in related reports. Risk-linked currencies like the Australian dollar, down 0.7%, and the New Zealand dollar, down 1%, reflect broader market risk aversion, potentially exacerbated by the uncertainty surrounding Trump's rate cut demands.

Commodities have also been affected, with crude oil prices surging due to fears of supply disruptions, and gold trading at US$3,366 an ounce, indicating a flight to safe-haven assets. These movements underscore the interconnectedness of geopolitical tensions, monetary policy, and global economic indicators, with Trump's calls adding to the complexity.

Regional and Global Context

The impact of Trump's demands extends beyond U.S. borders, influencing global financial markets. European and Asian indices, such as France's CAC 40 (down 0.8%) and Hong Kong’s Hang Seng (down 2.0%), have shown declines, partly attributed to fears of broader economic instability linked to U.S. policy uncertainty. In the U.S., futures for the S&P 500 and Dow Jones also declined, reflecting global interconnectedness and investor caution.

Conclusion

In summary, research suggests that Donald Trump has called for the equivalent of 10 Fed rate cuts, advocating for a 2.5 percentage point reduction in interest rates. This demand, rooted in comparisons with Europe's monetary policy and aimed at stimulating growth and reducing debt costs, has sparked controversy, with the Fed maintaining steady rates at 4.25%-4.5%. The situation remains fluid, with potential for further market volatility as the conflict between Trump and the Fed evolves. Observers are advised to monitor developments closely, given the interconnected nature of global markets and the potential for broader economic implications.

Key Citations

• Trump slams Jerome Powell after Fed holds rates steady

• Nearly one-third of $36T national debt needs refinancing Trump demands rate cuts

• Trump reiterates Fed should cut rates

• Trump statements on Federal Reserve

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