Trump isn’t waiting for things to change. He’s bringing down the hammer now.
And the Federal Reserve is reeling after Trump made a game-changing announcement.
President Trump is nudging the Federal Reserve to slash interest rates sooner rather than later, aiming to smooth the rollout of his ambitious tariff strategy on imported goods.
With the economy in flux, he’s making his case loud and clear, turning to Truth Social to rally support for his vision.
A Call for Rate Cuts
Late Wednesday, Trump fired off a post urging the Fed to act decisively. “The Fed would be MUCH better off CUTTING RATES as U.S. Tariffs start to transition (ease!) their way into the economy. Do the right thing.
April 2nd is Liberation Day in America!!!” he wrote. The push comes as he gears up to unveil a tariff system by April 2, designed to mirror trade barriers other nations place on U.S. products—a move he’s dubbed a game-changer for American prosperity.
Wall Street, however, is jittery, eyeing the potential ripple effects. While Trump sees lower rates as a cushion for his tariff plan, some warn the combo could stoke inflation.
Fed Chair Jerome Powell, speaking Tuesday, kept rates steady but hinted at cuts possibly by June.
“We’re going to have to see how things actually work out,” Powell said, acknowledging tariffs might spark short-term price hikes before settling down, though he stressed the uncertainty ahead.
Tariffs and Economic Crossroads
Trump’s blueprint involves sizing up each country’s trade policies toward the U.S. and slapping corresponding tariffs on their goods. Some nations might talk their way to lighter levies, but he’s unwavering on the timeline.
It’s not his first tariff rodeo—during his prior term, he tacked a 20% tariff on Chinese imports and 25% on steel and aluminum. This time, he’s betting on a broader approach to level the playing field, with rate cuts as the economic lubricant.
Unlike his first stint in office, when he routinely blasted the Fed for hiking rates, Trump has kept relatively quiet on the central bank this year—until now. His overnight post marks a shift, signaling he’s ready to lean on the Fed to align with his agenda.
White House press secretary Karoline Leavitt backed him up Thursday, saying, “He’s made it very clear that he believes lower interest rates are going to help this country boom, and this administration is working on lowering the rate of inflation caused by the previous administration. Every day, inflation is cooling.”
Balancing Act Ahead
Leavitt added a populist twist: “The president strongly believes in low interest rates, and I think the American public do, too.” She defended Trump’s “every right” to weigh in on the Fed’s moves, framing it as part of his mission to juice the economy.
Powell’s cautious outlook contrasts with Trump’s urgency, setting up a tension between the White House’s bold strokes and the Fed’s wait-and-see stance. As April 2 looms—Trump’s self-proclaimed “Liberation Day”—the interplay of tariffs, rates, and inflation promises to keep the economic spotlight burning bright.
