Donald Trump Calls On Fed To Slash Rates After Inflation Eases In April
The president’s remarks came shortly after government data showed that the US consumer price index increased by just 0.2 per cent in April — a third consecutive month of readings below expectations.
Following the release of April's weaker-than-expected inflation data, President Donald Trump renewed his public calls for the Federal Reserve to reduce interest rates. Using a social media post to make his case, Trump criticised Federal Reserve Chair Jerome Powell and suggested that the US central bank should act in line with global counterparts.
“No Inflation, and Prices of Gasoline, Energy, Groceries, and practically everything else, are DOWN!!!” Trump wrote. “THE FED must lower the RATE, like Europe and China have done. What is wrong with Too Late Powell?”
Arguing that the Fed's current approach was holding the economy back, Trump added, “not fair to America, which is ready to blossom.” He concluded, “Just let it all happen, it will be a beautiful thing," reported Bloomberg.
Modest CPI Growth and Softer Consumer Demand
The president’s remarks came shortly after government data showed that the US consumer price index increased by just 0.2 per cent in April — a third consecutive month of readings below expectations. The slower pace of price growth offered a temporary reprieve from inflationary pressures, which Trump used to justify his demands for a rate cut.
In the details of the report, goods most vulnerable to recent tariffs showed smaller price increases than anticipated. At the same time, categories such as hotels, airfare, and recreational services registered price declines, possibly reflecting weaker consumer demand for discretionary spending.
Despite April’s subdued inflation numbers, analysts caution that tariff-induced cost increases could take more time to appear in official data. Many items sold last month were imported before new trade measures took effect, and businesses may be shielding shoppers from price hikes to prevent declines in sales.
Tariffs Continue to Weigh on Outlook
Trump has minimised concerns that his administration’s tariff policies could worsen inflation or hurt consumers. The White House has imposed a 10 per cent global tariff on most countries, and additional duties targeting specific sectors remain either in effect or under consideration.
Though markets have been rattled by these moves, Trump maintains that the overall impact is under control. Meanwhile, some economists believe that the full effects of the tariffs have yet to materialise.
“Our forecast anticipates a spike in prices by June and July from the tariffs,” noted Michael Hanson, economist at JPMorgan Chase & Co., in a research note. “Economic analysts and Fed officials alike are watching and waiting to see the extent of the upward pressure.”
Investors currently expect the Fed to hold interest rates steady during its upcoming meetings in June and July, with potential cuts priced in for later this year, likely in September or December, based on futures market activity.
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Grocery Prices Offer Relief to Consumers
Amid concerns over tariffs and inflation, there was some positive news in April’s data. Grocery prices posted their biggest drop since 2020, offering financial relief to households. The steepest decline was seen in egg prices, which fell sharply following months of elevated costs linked to bird flu outbreaks.
Staples such as bacon, chicken, and rice also became more affordable last month, contributing to a broader sense of easing pressure on everyday expenses — a point Trump has repeatedly highlighted.
Trump has often pointed to falling gas and grocery prices to argue against inflation fears, even as he acknowledged that tariffs might force some Americans to scale back spending. Currently, the administration’s higher “reciprocal” tariffs affecting around 60 countries and the European Union are on pause at 10 per cent through July. That pause was announced in April to allow time for trade negotiations, though further increases remain possible depending on how those talks unfold.
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