Fed should lower rates by one full point: Trump

US President Donald Trump reiterated his call for the Federal Reserve to push through a major rate cut in the wake of the release of new data Wednesday on consumer inflation.

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Trump called the May Consumer Price Index a “great” number and wrote on Truth Social that the “Fed should lower one full point. Would pay much less interest on debt coming due. So important!!!” The May CPI showed a modest increase in inflation relative to a year ago, as many forecasters expect price pressures to accelerate due to the president's massive increase in import taxes on a wide range of goods. The overall CPI for last month rose by 2.4% relative to May 2024, a touch above the April year-over-year reading, while the CPI stripped of food and energy costs was up by 2.8% over the same time period.

The CPI readings arrive ahead of a Fed policy meeting next week where officials are virtually certain to keep the central bank's interest rate target range fixed at between 4.25% and 4.5%. Fed officials have signaled they are in a wait-and-see mode right now as the chaotic nature of the Trump administration's trade policy has made it very hard to know what lies ahead for the economy.

A wide range of economists, as well as Fed officials, believe the tariffs will increase inflation while lowering growth and depressing employment. Some of those risks have moderated as Trump has backed away from some of the most draconian tariffs.