Trump Advocates Lower Interest Rates Amid Tariffs

(Reuters) – President Donald Trump on Wednesday stated that interest rates should be lowered, which would align with his upcoming tariffs. This statement comes despite economists predicting that tariffs could drive inflation and delay rate cuts.

On Monday, Trump raised tariffs on steel and aluminum imports to a flat 25%, without exceptions. This measure aims to support struggling U.S. industries but risks igniting a trade war.

Trump expressed, “Interest Rates should be lowered, something which would go hand in hand with upcoming Tariffs!!!” on his Truth Social platform.

However, Federal Reserve Chair Jerome Powell informed U.S. lawmakers that the Fed is not in haste to lower short-term interest rates, citing a generally robust economy.

Powell is scheduled to testify before the House Financial Services Committee as Trump’s trade advisers finalize additional reciprocal tariffs. A Reuters poll indicated that the Federal Reserve is likely to hold off on rate cuts until the next quarter, as tariffs may elevate U.S. inflation and delay those cuts.

Recent data showed that U.S. consumer prices surged more than anticipated in January, leading economists to raise their inflation forecasts since Trump’s election. Concerns remain that his tariff policies could further escalate price pressures in the economy.