Will Interest Rate Cuts Happen Soon? Trump Thinks They Should
President Donald Trump restated his demand for Federal Reserve interest rate cuts on May 13, 2025, claiming that prices for gas, groceries, and “practically everything else” have declined with “no inflation.”
Recent economic data shows continuous price increases, contradicting the president’s claims and current market realities.
Trump Targets Fed Chair Powell Again in Interest Rate Cuts Campaign
On May 13, 2025, President Trump posted on Truth Social, urging the Fed to announce interest rate cuts and further criticizing Chairman Jerome Powell as “Too Late Powell” for not matching rate cuts in Europe and China.
“THE FED must drop the RATE… it will be a beautiful thing!” he wrote. The call echoes prior statements on April 21 and Jan. 23, 2025.
Trump’s push for interest rate cuts is in line with his overall economic agenda, including tariffs, which he claims will bring growth. However, his continuous posts and comments have raised concerns among economists about potential threats to the Fed’s independence.
CPI Data Contradicts Trump’s Falling Prices Narrative
Contrary to Trump’s claims of falling prices, economic data says the opposite, showing ongoing increases in prices.
The U.S. Consumer Price Index (CPI) reported a 2.3% inflation rate for the 12 months ending April 2025, down from 2.4%, according to the U.S. Labor Department data released May 13, 2025.
US Annual Inflation Rate (Source: CPI)
Food prices rose 2.8% in the 12 months ending March 2025, with groceries—food at home—up 2.4%, as reported by the U.S. Inflation Calculator. Gasoline prices, which averaged $3.15 per gallon nationwide in early May 2025, are down from $3.60 a year ago but stable, not declining, per AAA Fuel Prices.
12-Months Inflation Rate (Source: CPI)
The USDA predicts a 3.3% increase in food-at-home prices for 2025, which directly contradicts Trump’s claim of price reductions.
Economists Warn of Inflation Risks from Trump’s Policies
Trump’s comments most likely reflect the slowing rate of inflation instead of the actual price drops, a difference not mentioned in his posts and comments.
Economists, including Morningstar’s Preston Caldwell, have warned that Trump’s tariff policies could drive inflation to 4% by year-end, doubling the Fed’s 2% target. This complicates the Fed’s strategy, with Powell holding rates steady to assess tariff impact.
Trump’s repeated demands for interest rate cuts have raised concerns about pressure on the Fed’s autonomy, with Barclays’ Jonathan Millar pointing to risks to its independence.
As grocery and gas prices continue to increase, albeit slowly, consumers may face higher costs, especially if tariffs increase import prices. The difference between Trump’s claims and economic data shows ongoing disagreements over monetary policy and inflation control in 2025.
