Trump and Vance bash the Fed on interest rates as inflation slows
Trump has been pushing Fed Chair Jerome Powell to cut interest rates for months
Photo: Anadolu (Getty)
President Donald Trump is always happy to have an excuse to bash the Federal Reserve, and May’s soft inflation numbers from the Consumer Price Index (CPI) provided just such an occasion.
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On Tuesday, Trump posted on Truth Social: “CPI JUST OUT. GREAT NUMBERS! FED SHOULD LOWER ONE FULL POINT. WOULD PAY MUCH LESS INTEREST ON DEBT COMING DUE. SO IMPORTANT!!!”
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Vice President J.D. Vance agreed in his post on X. “The president has been saying this for a while, but it's even more clear: the refusal by the Fed to cut rates is monetary malpractice," he wrote.
Data from the Bureau of Labor Statistics showed that headline inflation rose 2.4% annually — up slightly from April’s 2.3%, but still below expectations. Month-over-month, prices climbed 0.1%, down from April’s 0.2% pace. Core inflation, a measure that excludes more volatile food and energy prices, also came in softer than expected.
May’s Consumer Price Index report is the first to reflect, at least partially, the shifting landscape following President Donald Trump’s April “Liberation Day” tariff blitz. While many of the most sweeping tariffs were paused for 90 days pending trade negotiations, baseline 10% duties remain in effect for most partners, and some industry-specific tariffs, including those on steel and aluminum, doubled to 50% as of early June.
Trump has been pushing for interest rate cuts since the start of his second term. In May, he called Federal Reserve Chair Jerome Powell a “fool who doesn’t have a clue,” after an announcement that interest rates would remain steady for the third month in a row—since Trump returned to office. By contrast, the Fed cut rates three times in late 2024. At the May announcement, Powell told reporters, “The economy itself is in solid shape,” before adding with a wink that was surely seen by Trump, “My gut tells me that uncertainty about the path of the economy is extremely elevated.”
Before Trump's re-election, the Harvard Kenndy School suggested that a new Trump administration might bring about the "end of the Federal Reserve as we know it."
-Catherine Baab contribut