Title: Trump's Brawl with the Fed: Cut Rates or Face the Music!
Federal Reserve should lower interest rates as tariffs are imposed, according to Trump
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Headline:Trump once again demands the Fed to slash interest rates, setting the stage for a confrontation with the central bank.
Keys:- Trump's echo chamber on Truth Social- The Fed's reserve (un)willingness to comply- April Fool's twist: "Liberation Day"
The one and only President Donald Trump amplified his plea for the Federal Reserve on Wednesday, desperately wanting them to chop interest rates as his import tariffs gradually ease their impact on our economy.
This cheeky plea came via a post on his Truth Social platform late Tuesday, which read: "The Fed would be way better off CUTTING RATES as U.S. tariffs start to transition (ease!) their way into the economy." Trump then added, "Do the right thing," and announced April 2nd as "Liberation Day in America."
Here's the kicker: the Trump administration has suggested implementing a brand new round of tariffs on April 2, including quadrillion-dollar, reciprocal ones on countries that slap levies on US exports. According to Trump, this day will be America's golden hour!
Wednesday saw the Federal Open Market Committee convene for their second meeting of the year, leaving the Fed's benchmark federal funds rate untouched at 4.25% to 4.5%.
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Central Bank Response:While announcing its decision to keep rates steady, the Fed admitted that "uncertainty around the economic outlook has intensified." Despite solid economic growth, the Fed expects real GDP growth to hit a mere 1.7% by year's end – worse than their earlier predictions of 2.1%. Moreover, the country's core inflation rate projections for 2025 soared to 2.8%, up from 2.5%. The reporters couldn't help but ask Fed Chairman Jerome Powell if the bank's inflation concerns stemmed from tariffs, to which Powell confirmed, "A good part of our inflation concerns are stemming from tariffs."
Trump's Planned 'Liberation Day':Trump initially declared April 2nd to be the day when "we will start reclaiming some of the massive wealth stolen from us due to the numerous inept and possibly corrupt politicians who have historically represented us." A day later, Treasury Secretary Janet Yellen informed Fox Business that some trading partners anticipate cutting back on their unfair tariffs as April 2nd approaches. Yellen remained upbeat, emphasizing that some planned reprisals might be avoidable, as deals are likely to be worked out.
For a deeper dive:- Fed Ups Inflation Forecast and Expects Less Economic Growth, Citing 'Uncertainty' (Forbes)- Trump aides prep new tariffs on imports worth trillions for 'Liberation Day' (Washington Post)
- The Federal Reserve, in its recent meeting, acknowledged an escalating uncertainty about the economic outlook, citing decreases in their projections for real GDP growth and a rise in the core inflation rate, particularly stemming from tariffs implemented by President Trump.
- Despite President Trump's calls for the Fed to implement interest rate cuts, optimistic forecasts suggest that some trading partners might cut back on unfair tariffs as 'Liberation Day' approaches, a day declared by Trump to reclaim wealth from historical inept politicians.
- Trump's ongoing standoff with the Fed regarding interest rate cuts gains traction, as his proposed tariffs gradually ease their impact on the economy, with 'Trump Tariffs' and 'Trump vs Fed' becoming hot topics on social media platforms.
