On Thursday (June 19) during the early trading session of the US stock market, US President Trump posted that he believed the US Fed should have cut interest rates by 250 basis points in its decision the previous day.
On Wednesday (June 18), the US Fed decided to maintain the target range for the federal funds rate between 4.25% and 4.50%, marking the fourth consecutive decision to keep interest rates unchanged.
Prior to the US Fed's upcoming announcement of its interest rate decision, Trump had criticized Fed Chairman Powell as a "not-so-smart politician," dissatisfied with his refusal to cut interest rates. Trump also stated, "Maybe I should go to the Fed myself," and claimed he could "do a better job than these people."
In its statement, the US Fed explained, "When considering the magnitude and timing of further adjustments to the target range for the federal funds rate, the Fed will carefully assess incoming data, the evolving outlook, and risks."
During the press conference, Powell once again emphasized that there was no rush to make policy adjustments, stating that under the current economic conditions, the US Fed was "fully positioned to wait and gain a clearer understanding of the economy's potential trajectory."
Powell said, "We have seen a slight uptick in goods inflation and indeed expect this to become more pronounced this summer." He pointed out that the impact of tariff policies could be lasting and that it would take time for their effects to fully materialize.
Since the beginning of the year, Trump has repeatedly criticized Powell and threatened to dismiss him from his position as Fed Chairman. Last week, Trump posted after the CPI report, urging the US Fed to cut interest rates by one percentage point (i.e., 100 basis points).
At that time, he also mentioned that a 100-basis-point interest rate cut could save the US a significant amount in interest payments on its soon-to-mature debt.
Media analysis suggests that many of Trump's policies, including tariffs and the "Big and Beautiful" bill, require the US Fed to cut interest rates to alleviate fiscal and debt pressures.
