U.S. President Donald Trump on Tuesday reiterated his demand for steep interest rate cuts, stating that rates should be lowered by at least “two to three percentage points.” His remarks came just hours ahead of Federal Reserve Chair Jerome Powell’s scheduled testimony before Congress.
In a post on social media, Trump once again criticized Powell, calling him a “very dumb, hardheaded person” and expressing hope that Congress would “really work him over.” Trump blamed Powell’s resistance to rate cuts for what he said would be long-term economic consequences, claiming, “We will be paying for his incompetence for many years.”
Drawing a comparison to the European Central Bank, Trump said Europe had already enacted 10 rate cuts, while the U.S. had “ZERO.” He argued that cutting rates by two to three points would save the country over $800 billion annually.
“If circumstances turn negative later, then raise rates,” Trump added.
Trump’s latest criticism comes as he continues to push for more aggressive rate reductions, a stance that diverges sharply from the Federal Reserve’s current cautious outlook.
The Fed held rates steady last week and signaled a careful approach going forward. Powell warned that Trump’s tariffs could raise inflation, giving the Fed even less room to cut rates further. Although the Fed lowered rates by a full percentage point in 2024, it has indicated a conservative approach toward additional cuts in 2025 and 2026.
