On Wednesday, U.S. President Donald Trump pressured Federal Reserve Chair Jerome Powell, demanding that he “must” lower interest rates.
Trump’s renewed push for a rate cut came after ADP’s employment report revealed a slowdown in private sector job growth for May.
Trump criticized Powell, who has cut interest rates three times last year but has maintained steady rates this year, suggesting that his reluctance to lower rates could potentially push the U.S. economy into a recession. Trump again attacked Powell by stating him “too late” in his actions.
In a post on his social media platform, Truth Social, Trump asserted, “ADP NUMBER OUT!!! ‘Too Late’ Powell must now LOWER THE RATE.”
Trump added, “He is unbelievable!!! Europe has lowered NINE TIMES.”
Due to the pause in additional rate cuts, Trump has been urging Powell to cut rates, even exploring options to remove Powell from his position as Fed Chair earlier this year.
It appears Trump believes rate cuts are necessary to mitigate the anticipated economic impact of his trade and tariff wars on the U.S. economy.
The job market, a cornerstone of the U.S. economy, is showing clear signs of deceleration.
Two days before the Labor Department’s May employment report, ADP’s private employment statistics revealed that private companies added only 37,000 new jobs last month.
This figure fell far short of the 110,000 jobs projected by Wall Street economists.
It marked the weakest growth since March 2023.
While economists expect the Labor Department’s May report to show an increase of 125,000 new jobs, ADP’s disappointing data raises the possibility that these expectations may not be met.
Last week, Trump summoned Powell to the White House to pressure him for a rate cut.
White House Press Secretary Karoline Leavitt reported that Trump told Powell he was making a mistake by not lowering rates, arguing that this was making the U.S. economy less competitive compared to China and other countries.
In response, Powell maintained that the Fed’s monetary policy should be guided by economic data, not politics.
Meanwhile, Trump’s claim that the European Central Bank (ECB) has lowered rates nine times is inaccurate.
While the ECB has consistently lowered interest rates unlike the Fed, it has done so seven times since June 2024. Another rate cut is anticipated at its governing council meeting on Thursday.
The Fed is scheduled to hold its Federal Open Market Committee (FOMC) meeting on June 17-18, but it is widely expected to keep rates unchanged.
