President Donald Trump expressed confidence on Friday that the Federal Reserve will begin cutting interest rates the day after meeting central bank chairman Jerome Powell.
The president shows that the meeting has gained a positive tone, and believes the Fed is ready to provide the monetary policy easing he has been seeking for months.
“I think we had a very good meeting on interest rates, and (Powell) told me…it’s very strong, the country is on track,” Trump told reporters. “It means I think he’ll start recommending lower rates.”
Powell and his fellow policymakers were reluctant to lower the rate as they waited to see the impact of Trump’s tariffs on inflation. In fact, one argument Powell has opposed to cuts is that the economy is strong enough to withstand higher rates as authorities monitor the evolution of data.
Before Trump’s remarks, White House budget director Russell Vought kept the heat of the Fed’s renovation project and pushed the central bank’s review lawsuit while pushing lower interest rates.
Vought reflected Trump’s desire to begin easing monetary policy as a way of supporting the economy, particularly the housing market.
“There are a lot of issues with the Fed. We want to make sure these questions can be answered over time,” Vought said in the appearance of “Squawk Box.” “This is not a pressure campaign against the Federal Reserve Chair.”
Tone following Thursday’s meeting was settled for months and even years, between the Trump White House and the Federal Government.
Both sides characterized the tour as positive, with Federal Reserve officials issued a statement Friday saying the central bank was “respected” to welcome Trump and other Republican officials.
“We are grateful for the President’s encouragement to complete this important project,” a Fed spokesman said. “We are continuing to be committed to being careful and careful about these resources so that the project can be seen until completion.”
Pressure to continue
Still, Vought said the White House plans to track Treasury Secretary Scott Bescent taking into account the need for a review of the “The Werly” Federal Reserve.
In addition to issues with construction projects and interest rates, authorities have also criticised the Fed for its operational shortages due to higher interest rates. In the past, the Fed has transferred what it has earned from its investments to the Treasury, but has totaled nearly $80 billion in 2024 as the profits paid to the bank reserves outweigh the investments they have made.
“We are continuing to try to clarify policy concerns about the Fed’s management,” Vought said. “You’re not only in the Fed, you’re not criticising your way. It doesn’t exist in the American political system.”
At a meeting Thursday, Trump also expressed confidence that Powell and his colleagues will see the presidential path when it comes to fees.
“I think the chairman will do the right thing,” Trump told reporters. “I mean, as the expression goes on, it may be a little too late, but I think he’s going to do the right thing.”
Despite his previous rancor, Trump recently retreated his previous threat of trying to fire the Fed’s chair, reiterating on Thursday that he has not seen the need for Powell to resign.
Futures Markets has few opportunities to cut rates when the Fed runs next week. The next move is not expected until September. Market prices are also leaning towards the possibility of another cut by the end of the year.
