On Monday, March 24, U.S. President Donald Trump once again urged the Federal Reserve to lower interest rates during a Cabinet meeting, stating that current prices and energy costs are declining, and the Federal Reserve System should promptly adjust monetary policy. He stated, "Overall, prices are going down, and energy prices are also declining. I hope the Federal Reserve can lower the rates."
Recently, Trump has frequently applied pressure on the Federal Reserve through social media. Last week, the Federal Reserve announced that it would maintain the federal funds rate target range between 4.25% and 4.50%, marking the second consecutive meeting without changes. Since December last year, the Federal Reserve has not further adjusted interest rates.
On the social platform Truth Social, Trump posted that "the Federal Reserve better cut rates, because the impact of U.S. tariffs is beginning to gradually seep into the economy." He further noted that prices for eggs, groceries, and gasoline are falling, and it would be "best" if the Federal Reserve takes action.
However, according to official data, there is currently no clear necessity for a rate cut. The U.S. Department of Labor reported that the Consumer Price Index (CPI) for February rose 2.8% year-over-year, with the core CPI (excluding food and energy) up 3.1%, both above the Federal Reserve's 2% inflation target.
The market is currently focusing on the February Personal Consumption Expenditures (PCE) Price Index to be released this Friday, a key inflation measure the Federal Reserve closely monitors. The market generally expects February PCE to rise by 2.5% year-over-year, with core PCE increasing by 2.7%.
Federal Reserve Chairman Jerome Powell remarked after the March 19 policy meeting that there is no urgency to adjust the current policy stance and noted that market uncertainty remains high. He also stated that Federal Reserve officials generally believe that the tariff policies promoted by Trump may lead to inflationary pressures in the medium term.
Atlanta Federal Reserve President Raphael Bostic also mentioned in a media interview that although market concerns about the economic outlook are rising, the existing data has yet to show a significant economic slowdown. He emphasized that the inflationary impact of these tariff measures may not be a short-term phenomenon.
Overall, despite the President's continued desire for a rate cut, Federal Reserve officials have generally taken a more cautious stance, emphasizing the need to rely on economic data for judgment and avoid premature implementation of accommodative policies.
