Trump Called It First: Powell’s Delayed Rate Cuts Exposed by Flawed Jobs Data in 2025
- How Bad Jobs Data Fooled the Fed
- The August Jobs Disaster That Changed Everything
- Inside the Fed’s Growing Divide
- What Comes Next for Rates?
- FAQs: The Fed’s Jobs Data Debacle
– The Federal Reserve’s patience on interest rates has backfired spectacularly. Revised labor data reveals Jerome Powell’s decision to hold rates was based on shockingly inaccurate jobs numbers – exactly as Donald TRUMP predicted months ago. Now, with August’s dismal employment report showing just 22,000 new jobs, the Fed faces mounting pressure to cut rates immediately while scrambling to explain why they ignored warning signs.
How Bad Jobs Data Fooled the Fed
Remember when Powell insisted the labor market could handle steady rates? Turns out those "strong" 2025 job numbers were pure fiction. The Bureau of Labor Statistics just wiped 300,000 positions from their books across four months of revisions. "The Fed was flying blind," says BTCC analyst Mark Chen. "They were making trillion-dollar decisions using numbers that belonged in the trash."
What’s wild is how obvious the cracks were. Even with inflation stubbornly above 2%, Powell kept pointing to "robust employment growth" through Q2 2025. Then came July’s revisions: June actually13,000 jobs, not gained them. Trump nailed it back in May on Truth Social: "Jerome ‘Too Late’ Powell is reading fake numbers while Main Street burns."
The August Jobs Disaster That Changed Everything
Friday’s report was the final nail. Just 22,000 new jobs in August – a third of expectations – with unemployment creeping up to 4.3%. "This isn’t a slowdown, it’s a collapse," muttered one Wall Street trader watching the numbers drop. The Fed’s own break-even threshold (jobs needed just to match population growth) used to be 100,000+. Now? St. Louis Fed President Musalem admits it might be as low as 30,000.
Here’s the kicker: Powellsaw it coming. His August 28 Jackson Hole speech hinted at "shifting risks," but he waited for concrete proof. "That’s like waiting to see flames before calling the fire department," Labor Secretary Chavez-DeRemer blasted on CNBC. She’s leading the WHITE House charge demanding immediate cuts, arguing businesses need cheaper capital to hire.
Inside the Fed’s Growing Divide
Not all Fed officials were caught off guard. Governor Chris Waller pushed for a 25-basis-point cut back in July, warning about labor market fragility. Meanwhile, UBS and EY economists now see September’s cut as inevitable (markets price it at 99% odds). The real debate? Whether to go big with 50bps or save ammunition for 2026’s expected turbulence.
Capital Economics’ Bradley Saunders cautions against overreacting: "Yes, 22,000 jobs is terrible, but 4.3% unemployment isn’t crisis territory yet." Still, with job openings drying up and immigration slowing, the Fed’s old benchmarks clearly need updating – something Trump’s team had argued since 2024.
What Comes Next for Rates?
The September 16-17 FOMC meeting just became the most consequential since 2020. Powell must now:
- Cut rates (25bps is baked in; 50bps would shock markets)
- Explain why faulty data misled policy
- Rebuild credibility with Main Street and Wall Street
One thing’s certain: Trump won’t let him forget this blunder. As the former president posted last night: "Told you so. America loses while Powell plays professor."
FAQs: The Fed’s Jobs Data Debacle
How many jobs were removed in the BLS revisions?
Over 300,000 previously reported jobs across April-July 2025 were erased in the latest revisions.
What’s the current probability of a September rate cut?
Markets are pricing in a 99% chance of at least a 25-basis-point cut at the September 16-17 meeting.
Why did Trump criticize Powell as "Too Late"?
Trump had warned since early 2025 that Powell was relying on inflated jobs data and should cut rates preemptively.
