The US president appealed directly to Federal Reserve Governor Jerome Powell on social media. Powell predicted "higher inflation and a slowdown," ruling out any changes to monetary policy.

US President Donald Trump urged Federal Reserve Chairman Jerome Powell on Friday (04.04.2025) to cut interest rates, saying it was the perfect time to do so.

"Cut interest rates, Jerome, and stop playing politics!" Trump wrote in all caps on Truth Social, while Powell is currently giving a speech at a business forum.

Trump used his address to attack Powell, whom he has criticized numerous times, pressuring him to lower interest rates. This is a stance he also adopted during his first term (2017-2021), but which represents a departure from the tradition of US presidents respecting the Fed's independence.

"He's always late," Trump said, referring to Powell, "but now he could change his image, and quickly."

IT'S TOO EARLY TO KNOW "THE APPROPRIATE MONETARY POLICY"

Powell, who is in Virginia participating in an event, said in a written statement: "It is becoming clear that tariff increases will be significantly larger than anticipated."

"The same is likely to be true of the economic effects, which will include higher inflation and slower growth," he said, adding that it is "too early" to consider changes in U.S. monetary policy and, also, "too early to say what the appropriate monetary policy approach is" with the tariffs.

The Federal Reserve is the U.S. central bank and the entity responsible for monetary policy, with the mandate to contain inflation.

Trump argues that price levels have fallen since he became president, making it "the perfect time" to lower interest rates.

Furthermore, the stock market is falling, including international stocks, but especially the New York stock market, something Trump may want to stem with a rate cut.

But the tariff measures he has enacted are clearly inflationary, so the Fed, which is an independent body, will likely have to raise rates to contain rising prices.

Powell's comments suggest the Fed is in no rush to cut its benchmark interest rate from its current elevated range of 4.25% to 4.50% as it continues its efforts to bring inflation down to its long-run target of 2%.

Powell asserted today that his organization's monetary policy is "well positioned" to manage the risks posed by the trade war and announced that they will wait for greater clarity before proposing further rate cuts.