Trump Slams Fed’s Rate Cut, Says 50 bps Was The “Minimum” Needed
Speaking to reporters after Powell’s address, Trump described the cut as “rather small” and said it “could have been doubled, at least doubled”
- Fed cut rates by 25 basis points, Trump wanted 50.
- Powell signals cautious approach, awaiting economic data.
- FOMC vote revealed divisions on rate decision.
As the Jerome Powell-led US Federal Reserve announced a 25-basis-point rate cut on Wednesday, President Donald Trump criticised the move, arguing that a reduction of 50 basis points would have been more appropriate. Speaking to reporters after Powell’s address, Trump described the cut as “rather small” and said it “could have been doubled, at least doubled”. He added that Federal Reserve rates should “be the lowest in the world”.
Powell Signals Cautious Approach
The Fed’s decision brought the benchmark rate to a range of 3.50% to 3.75%, the lowest level in three years. Powell indicated that the central bank would take time to evaluate incoming economic data before deciding whether to pause or further reduce rates, saying the Fed was “well positioned to wait and see how the economy evolves from here”. He also ruled out any possibility of a rate hike at the next meeting.
A Split Within the Federal Reserve
The rate decision underscored divisions within the Federal Open Market Committee. The 25-basis-point cut was passed by a 9–3 vote, with three members dissenting. Chicago Fed Chief Austan Goolsbee and Kansas City Fed President Jeffrey Schmid favoured keeping rates unchanged, while Fed Governor Stephen Miran, an economic advisor to Trump, supported a deeper 50-basis-point cut.
Speculation Intensifies Over Next Fed Chair
With Powell’s term ending in May 2026, uncertainty looms over who Trump will appoint as the next Federal Reserve Chair. National Economic Council Director Kevin Hassett is widely seen as the frontrunner, ahead of former Fed Governor Kevin Warsh and current board member Christopher Waller. Hassett is viewed as market-friendly and is believed to align with Trump’s preference for further rate cuts. While Trump previously said he would assess candidates based on their willingness to lower rates quickly, he has not indicated when he will make the decision. A week earlier, he suggested an announcement could come early next year, but Hassett hinted on Wednesday that Trump may finalise his choice “in the next week or two.”
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