After CPI Showed Positive Signs, Trump Called Again: US Fed Should Cut Interest Rate as Soon as Possible

After the inflation report was released, US President Trump once again pressured Fed Chairman Powell to take action to cut interest rates.

On Tuesday (May 13) local time, Trump wrote on the social platform Truth Social, "There is no more inflation! Prices for gasoline, energy, groceries, and almost all other goods are falling!!!"

"The Fed must lower interest rates, just as Europe and China have already done," Trump added. "What's the matter with 'Mr. Delay' Powell? Isn't this unfair to the US, which is about to take off?"

Trump concluded by writing, "Let the interest rate cut happen—it would be a wonderful thing!"

Earlier in the day, the US Bureau of Labor Statistics released the monthly Consumer Price Index (CPI) report. The data showed that the US CPI rose 0.2% MoM and 2.3% YoY in April, both lower than market expectations of 0.3% and 2.4%, respectively.

Excluding the more volatile food and energy prices, the core CPI rose 0.2% MoM and 2.8% YoY, in line with expectations.The 2.3% YoY increase in CPI and the 2.8% YoY increase in core CPI were both the lowest since early 2021.

The data release came as Trump downplayed the risks that his tariff policies might trigger price increases and shortages of goods. Currently, Trump has imposed a baseline tariff of 10% on nearly all countries and has implemented or threatened to implement additional tariffs on key industries.

These measures have disrupted the market and sparked concerns about rising costs for US consumers and an economic slowdown. Some analysts believe that the April inflation report did not contain bad news because many imported goods entering the US that month had arrived before the tariffs took effect.

Additionally, some companies chose to absorb the costs themselves to avoid a decline in demand amid consumers' existing economic anxieties. Weak performances in items such as airfares, hotels, and entertainment also reflected signs of softening demand, limiting the increase in CPI.

However, there was one definite piece of good news in the report: grocery prices saw their largest MoM decline since 2020, with egg prices plunging 13% MoM, the biggest drop in four decades. Prices for bacon, chicken, and rice also fell.

This year, the US Fed has maintained interest rates unchanged, leading Trump to continuously pressure Powell to cut interest rates. Almost after every interest rate decision, non-farm payrolls data release, and CPI report, Trump would post on social media or call on the Fed to cut interest rates during press conferences.

However, Powell and his colleagues have stated that Trump's large-scale tariff war has increased the risks of inflation and unemployment in the US, and that "the central bank will not rush to act." At the press conference following last week's interest rate decision, Powell used variations of the word "wait" as many as 22 times.