Trump wants lower interest rates to ‘counteract’ the inflation from his own tariff policies

• President Donald Trump wants the federal reserve to cut interest rates as an anti-enforceable economic slowdown and rising prices for tariffs. However, the common uncertainty only makes it harder for feeding to end their current patterns on exchange rate cuts.

President Donald Trump and the federal reserve chair Jerome Powell has disagreements.

Thursday Trump again Called to Fedand particularly Powell to lower interest rates. Powell had only a day before repeated the Fed view that the relative force of the economy meant that we should not rush to decide.

“So far, we have a good position to wait for greater clarity before taking into account the adjustments of our policy position,” said Wednesday.

Powell’s careful approach was hit by the president. In the social media on Thursday morning, Trump called “mess” and accused him “too late and wrong.”

Trump wants the inevitable deceleration of low interest rates, as its tariff policy is conducted by consumer’s expenses and world kiosk trade. Powell, whereas, does not want Soon to cut too early because he is afraid of going back to inflation. Powell is also cautious because he is dumped into the unheard of economic space, as Trump’s tariff policy is so unprecedented that the results are unpredictable.

The question of what should do with interest is against an extreme unique economic background. Fed has made significant progress on the reduction of inflation from June 2022 to 9%. This was especially without an increase in unemployment. As of March, inflation has been 2.4%A number

Since prices have stabilized, the labor market has been fired, economy (and markets) have been sent to sudden shocks of tramp’s tariff policy with sudden shocks. Not only was the tariffs, unlike any modern trading policy, but they were also constantly changing sometimes, sometimes even on the same day.

All that have been done to the level of uncertainty that investors have found it difficult to stomach. The markets were immersed, the expectations of inflation increased, and it was terrified for both companies and consumers. None of that is good for the economy that used to drink well before.

White House vs. Fed

Now Trump wants to reduce interest rates to counteract these effects.

“Trump probably thinks that low rates will help the economy and that they can counteract any possible negative impact on the continuous commercial war,” said Francesco Biach, the chairman of the Department of Economics of the University of Johns Hopkins.

In fact, Trump wants low inflation to have juice, which is expected to slow down significantly due to its tariffs. Wednesday at Powell said The forecast of the back has seen “slow growth” for the US economy for the coming year. Some wall street banks such as Morgan Stanleyas well as knock their GDP ratings.

But Trump’s actions have done little to reduce guarantees. “The White House’s actions have made it harder to reduce Fed rates,” said Brett home, a professor of Colombian Business School Economics.

Most expected effects of tariffs are likely to bring higher inflation that usually calls Appreciate Campaignsno cuts. Tariffs will increase business prices on any component or product they go from a foreign provider. Sellers will hold those who will spend the consumers who will see higher sticky prices. If inflation will stimulate, feed will not have alternatives than to raise the pace, on the contrary, what does it want to trump?

Fed started the reduction cycle of its interest rates on 2024 on 202 of UMMOBO 50 base unitsA number then it is reduced by the end of the previous year. These reductions have reduced the target level of federal funds from 5.25% to 5.5% to their current levels by 4.25% to 4.5%. In 2025, feeding still needs to reduce rates. Fed was already in a To keep pattern The reductions of the exchange rate, which will only continue, as the economic picture becomes less clear.

“The incident has really been harder for the past two weeks,” said Jose Torr, Senior Economist of Interact Brokers Jose Torr. “So it definitely strengthened to keep the job.”

To the question why Fed to keep Fed for a stable year, Torres was unequivocal. “Very simple,” he said. “They started the road very quickly.”

After the reductions in that interest rate, inflation began inches again. In September 2024, the PCE index, which is the criterion of Fed’s preferred inflation, was 2.1% by February 2025, it was up to 2.8%. Wall Street expects Between two and three interest rates in the second half of the year. The risk of cutting soon is that they send prices to shoot, which is already a practical certainty, given the current tariffs.

“The danger of lowering the inflation is that inflation is crawling, and markets lose confidence that Fed is really committed to progress,” said Bach.

When the exact pace is to cut off but is a fine balancing action. Go very soon, and inflation rises, they are late, and the economy can come to screams. Being late means that there is no sufficient stimulus for the economy, which then descends to decline. However, inflation can be a more welcoming task than the alternative to the unemployment of the recession according to Torres.

“There is one important component here that the issue of inflation in the Executive branch is much better than the work problem,” Toron said. “Thus, the leaders of that trade policy may cause weakness to work.

This story was originally shown Fortune.com