President Donald Trump launched a renewed salvo against the Federal Reserve on Tuesday, asserting the central bank is lagging in its response to what he characterized as a significantly cooling inflationary environment, particularly after April’s inflation figures came in softer than anticipated.
In a direct and pointed message on his Truth Social platform, Trump voiced his impatience with the current monetary policy stance.
“No Inflation, and Prices of Gasoline, Energy, Groceries, and practically everything else, are DOWN!!! THE FED must lower the RATE, like Europe and China have done. What is wrong with Too Late Powell?” he wrote, directly referencing Fed Chairman Jerome Powell.
This marks the latest in a consistent pattern of public critiques from the president aimed at the Fed chief, often linking economic performance directly to the central bank’s interest rate decisions.
Inflation’s slowdown: a nuanced picture
The catalyst for Trump’s remarks was Tuesday’s consumer price index (CPI) report, which indicated a year-over-year price increase of 2.3% in April.
This figure represents a slight deceleration from March’s 2.4% and marks the slowest pace of inflation recorded since 2021.
However, while this data points to a moderation in price pressures, it still diverges from the “no inflation” scenario painted by the president.
His persistent calls for interest rate reductions have become a familiar refrain, yet the central bank did not accommodate this request during its most recent policy meeting last week.
The Fed’s cautious stance amid tariff headwinds
The Federal Reserve, operating under its mandate of price stability and maximum employment, maintained its benchmark interest rate in a range of 4.25%-4.50% at its last gathering.
The decision, as noted by the Fed, was influenced by an economic landscape where tariffs are “creating considerable inflation and labor uncertainty.”
This independent stance contrasts sharply with the president’s demands for more accommodative monetary policy.
Despite the somewhat encouraging April inflation numbers, Wall Street forecasters remain watchful, warning that inflationary pressures could pick up again as soon as next month.
A key factor in this outlook is the anticipated lag before the full impact of tariffs is reflected in consumer price data.
Adding to this cautionary note, Fed Governor Adriana Kugler, in a speech delivered on Monday, outlined that even a recent trade truce between the US and China might not fully quell price growth.
Kugler highlighted that, according to her discussions, “most executives still plan to pass on tariff costs to consumers,” suggesting that underlying inflationary forces linked to trade policy may yet exert upward pressure on prices.
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