Trump Urges Fed to Cut Rates by 3 Percentage Points After June CPI, Says "Consumer Prices Are Low"

Urges Rate Cut Again on Truth Social
Claims "Annual $1 Trillion Savings" in Treasury Bond Interest

On July 15 (local time), U.S. President Donald Trump urged the Federal Reserve (Fed) to cut interest rates by 3 percentage points after last month's core Consumer Price Index (CPI) came in lower than expected.

AFP Yonhap News

On this day, President Trump posted on his own social networking service, Truth Social, saying, "Consumer prices are low," and demanded, "The Fed should cut interest rates immediately!"

He continued in another post, stating, "The Fed should lower rates by 3 points (3 percentage points)," and argued that "this would save $1 trillion annually in (Treasury bond) interest costs."

After the U.S. Department of Labor announced that the core CPI for June fell short of market expectations, Trump once again urged Fed Chair Jerome Powell to cut rates. Last month, the core CPI, which excludes the highly volatile energy and food sectors, rose 2.9% year-on-year. This was a slight increase from May's 2.8%, but still below the expert forecast of 3.0%. However, the headline CPI, which includes all items, increased by 2.7% year-on-year, surpassing the market expectation of 2.6% and accelerating from 2.4% in May. While there was no "surprise rebound" in inflation, some analysts noted that the effects of tariffs were beginning to become visible.

President Trump has continued to increase pressure on Chair Powell, repeatedly calling for a rate cut even the day before.

In a White House speech the previous day, he said, "I just wish he (Chair Powell) would lower the rates," adding, "I tried to be nice, but it was useless." He then launched a direct attack, calling Powell "an idiot and a fool," and demanded that rates be lowered to the 0% range. In particular, he pointed out, "At (interest rates of) 1 percentage point, (Treasury bond) interest costs are $360 billion. At 2 percentage points, it costs $600 billion to $700 billion. That is far too high," expressing concern over the burden of Treasury bond interest payments.