Vice president joins Trump in urging Powell, Federal Reserve to slash rates at its next meeting
Vice President JD Vance intensified his criticism of Federal Reserve Chair Jerome Powell this week, calling for immediate interest rate cuts and accused the central bank of harming working Americans.
Vance has become increasingly vocal about monetary policy in recent months. On Wednesday, he took to social media, criticizing the Fed for holding rates steady despite signs of economic cooling.
“The president has been saying this for a while, but it’s even more clear: the refusal by the Fed to cut rates is monetary malpractice,” Vance said in a post on X.
The remarks came after the latest consumer price index report, which showed a 0.1% increase on both all-items and the core, excluding food and energy. The inflation level on all items came in at 2.4% and 2.8% on the core items. This is above the Fed’s target of 2.0%.
At the same time, President Trump went to Truth Social to continue his barrage of pressure on Powell and the Federal Reserve.
“CPI JUST OUT,” Trump said. “GREAT NUMBERS! FED SHOULD LOWER ONE FULL POINT. WOULD PAY MUCH LESS INTEREST ON DEBT COMING DUE. SO IMPORTANT!!!”
The vice president’s remarks reflect a growing push within conservative circles to frame the Fed as an obstacle to economic recovery. This message aligns with Trump’s broader narrative that government institutions are failing ordinary Americans.
Vance’s comments also illustrate how monetary policy is becoming a wedge issue. While presidents do not directly control the Fed, an independent institution, political pressure can influence appointments and shape the central bank’s leadership over time.
Both Vance and Trump have argued that Powell’s refusal to lower rates stifles economic growth and places unnecessary pressure on working-class Americans. Trump has signaled that Powell, whose term ends in 2026, would likely not be reappointed.
The Fed has yet to respond to the latest political salvos. Still, Powell has repeatedly emphasized the importance of maintaining independence from partisan influence. This stance will likely face more tests as the administration pressures the central bank.
Powell, who was first appointed by Trump in 2017 and reappointed by President Joe Biden in 2021, has said the central bank remains focused on achieving its 2% inflation target before considering rate cuts. While some Fed officials have hinted that cuts could come later in 2025 if inflation continues to cool, Vance and other critics argue that the current policy path risks tipping the economy into recession.
While some economists have warned that cutting rates too soon could reignite inflationary pressures, others note that borrowing costs have weighed heavily on sectors like housing, construction, and small business lending. The Fed is set to announce its next policy decision next Wednesday, and most economists believe they will keep rates the same.
Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
