Trump Ramps Up Pressure on the Fed: ’Time for Rate Cuts Now’

Former President turns up heat on central bank as economic winds shift.

Trump's Fed Gambit: Political Pressure or Prudent Policy?

The ex-President's latest broadside comes as markets increasingly price in dovish pivot. But with inflation still lurking, Powell & Co. face their usual dilemma: act too soon and risk credibility, too late and trigger recession. Just another day at the marble palace where 'data dependence' often means 'whichever way the political winds blow'.

Bonus jab: At least crypto traders are used to volatility—unlike traditional finance folks who still think 2% swings constitute 'extreme market conditions'.

FED Faces Tough Call as CPI Shows Mixed Inflation Signals

July’s Consumer Price Index (CPI) brought a complicated picture. Headline inflation rose just 2.7% year over year, lower than expected. But Core inflation, which strips out food and energy, climbed 3.1%, slightly hotter than forecasts. Services prices jumped, while goods inflation stayed tame — even after Trump’s tariffs. For the Fed, this means inflation is still more than a full percentage point above its 2% target. Officials are split: some see the slowdown in goods prices as room to ease policy, while others worry that cutting rates too soon could reignite price pressures. The September meeting could be a turning point.

FED Rate Cut Push Gains Support Amid Weak Jobs Data

Scott Bessent, Treasury Secretary under Trump, is calling for a bold MOVE — a 50-basis-point cut in September. He argues that soft inflation and slowing job growth leave the Fed no reason to wait. The July jobs report showed just 73,000 positions added, with unemployment ticking up to 4.2%. Previous months saw sharp downward revisions, dragging the three-month average to only 35,000 jobs. Some Fed members, like San Francisco’s Mary Daly and Governor Michelle Bowman, warn that further delays could worsen labor market weakness. Others, like Kansas City’s Jeff Schmid, still favor patience. This split sets the stage for a heated policy showdown.

Trump’s FED Shake-Up and Search for a New Chair

Behind the scenes, Trump is preparing for more than just a rate cut fight. With Jerome Powell’s term ending next May, the search for a new Fed chair is already underway. Bessent says Trump wants someone with firm views on monetary policy, a clear regulatory stance, and the skill to reform what he calls a “bloated” central bank. Stephen Miran, Trump’s nominee for the open Fed board seat, could join before the September meeting if confirmed. That WOULD strengthen Trump’s influence inside the Fed as he pushes for aggressive monetary easing.

Markets Watch FED Moves as Inflation, Jobs, and Politics Collide

Investors see the soft headline CPI and slowing jobs growth as signs the Fed will cut rates — maybe even three times this year. Stock markets have already hit record highs on that expectation. Yet uncertainty remains. Tariffs haven’t fueled the inflation spike many feared, but CORE prices are still sticky. Job growth is cooling, but consumer spending remains solid. With politics heating up and Trump pressing hard for action, the Fed’s September meeting could set the tone for the rest of the year. Whether it opts for a cautious 25-point trim or Bessent’s proposed half-point cut, the decision will shape both the economy and the 2024 election narrative.