President Donald Trump and Vice President JD Vance are uniting in their calls for the Federal Reserve to lower interest rates. Their joint plea comes in response to recent inflation data, which indicates tariffs have not significantly impacted price increases.
In a post on social media Wednesday morning, Vance reiterated Trump’s longstanding stance that the central bank should ease its monetary policy. He criticized the Fed’s decision to maintain high rates, labeling it as “monetary malpractice.”
Vance’s comments followed a report from the Bureau of Labor Statistics revealing that the consumer price index (CPI) rose by only 0.1% in both the overall and core categories, which excludes food and energy prices. On a year-over-year basis, inflation remains above the Federal Reserve’s target at 2.4% and 2.8%, respectively.
Although Trump had not publicly commented on the CPI figures by Wednesday, he has been vocal about his demand for cuts from Federal Reserve Chair Jerome Powell and other members of the Federal Open Market Committee (FOMC). The last reduction occurred in December, and some officials have expressed concerns about the long-term impacts of tariffs on pricing. Trump is advocating for a one-point decrease in the current target federal funds rate, which stands between 4.25% and 4.5%.
The FOMC’s imminent interest rate decision is set to be announced next week, with market expectations indicating no likelihood of a reduction following the two-day meeting. Traders anticipate a rate cut may occur in September, according to data from the CME Group.
Administration officials are highlighting the recent decline in inflation and a softening labor market as justifications for lowering rates. However, Elyse Ausenbaugh, head of investment strategy at J.P. Morgan Wealth Management, noted the complexity of the situation. “To me, that combination says it may be time for another rate cut, but I expect the Fed to emphasize the ongoing uncertainty and a desire to not act too early. It’s a tough spot,” she remarked.
