Trump says central bank rates should rival other countries among lowest in world
After attempts to persuade Federal Reserve chair Jerome Powell to lower rates via press conferences and via social media, Trump turned to a handwritten note on Monday. He called for Powell and the Fed to lower rates to match some of the lowest rates in the world.
Trump’s note was written on a graphic listing the world central bank rates. According to the graphic, the US has the 35th lowest rates by country at 4.5%. Switzerland has the lowest rates at 0.25%.
In addition to the note, a grouping of countries was singled out from Switzerland to Thailand with rates ranging from 0.25% to 1.75%, with a note saying that the US rate “should be here.”
The note was posted on Trump’s Truth Social account on Monday afternoon and was signed by the president.
“Jerome – You are, as usual, “too late,” Trump wrote. “You have cost the USA a fortune – and continue to do so – You should lower the rate – by a lot! Hundreds of billions of dollars being lost! No inflation.”
More criticism from Washington
Federal Housing Finance Agency director William J. Pulte has also continued his criticism of Powell on social media. Posting on his X account, Pulte has called for Powell to resign.
“Mr. Too Late is too late on his resignation,” Pulte posted after Trump’s handwritten note was made public.
Lawrence Yun, chief economist at National Association of Realtors (NAR), believes the Federal Reserve is too focused on tariffs and not enough on other disinflationary factors. He urges the Fed to widen its view for earlier rate cuts. https://t.co/IcIyoRhjqA
— Mortgage Professional America Magazine (@MPAMagazineUS) June 17, 2025
Over the weekend, Pulte concurred with Trump’s assessment that the central bank rate should be at 1% or 2%, and said that the higher rates are damaging the mortgage industry.
“I’ve been speaking with some of the biggest homebuilders and mortgage companies in the country,” Pulte said on X on Sunday. “They say, and I agree, that Powell’s rates are setting up further Biden/Powell damage in our housing market. It needs to stop.”
Fed future path unclear
Despite the steady criticism from the White House, the Federal Reserve has held rates steady. Powell commented last week that the Federal Reserve was in no rush to cut interest rates.
“For the time being,” Mr. Powell said in prepared remarks, “we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments.”
Individual Fed members have given mixed signals on the future path for the rest of 2025.
Federal Reserve Bank of Atlanta president Raphael Bostic said Monday he anticipates the central bank cutting rates just one time over the rest of the year, stating the uncertain impact on tariffs and a solid labor market as reasons for hesitancy.
However, other members of the Fed are not only calling for more cuts, but those cuts could start as early as July. Fed governor Christopher Waller said Friday in an interview with CNBC that he would favor a rate cut during the July meeting, rather than waiting until September.
“I think we’re in the position that we could do this and as early as July,” Waller said. “That would be my view, whether the committee would go along with it or not.”
He said that labor market concerns were leading him to favor an earlier cut than previously forecasted.
“If you’re starting to worry about the downside risk [to the] labor market, move now, don’t wait,” he said. “Why do we want to wait until we actually see a crash before we start cutting rates? So, I’m all in favor of saying maybe we should start thinking about cutting the policy rate at the next meeting, because we don’t want to wait till the job market tanks before we start cutting the policy rate.”
CME Group’s FedWatch, which tracks the likelihood that the Fed will change rates at upcoming meetings based on the 30-day Fed Funds futures prices, are still betting on three rate cuts for the rest of 2025. They believe the cuts will occur in September, October, and December. So far, CME FedWatch only gives a 21.2% chance of a cut in July.
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