Trump And JD Vance Push Fed To Slash Interest Rates After Mild Inflation Report, Calling Current Policy 'Monetary Malpractice'

President Donald Trump and Vice President JD Vance intensified pressure on Federal Reserve Chairman Jerome Powell to cut interest rates by a full percentage point Wednesday, following the release of cooler-than-expected May inflation data that showed consumer prices rising just 0.1% monthly.

What Happened: Vance labeled the Fed’s reluctance to cut rates as “monetary malpractice” in a post on X, echoing Trump’s aggressive stance. “The president has been saying this for a while, but it’s even more clear: the refusal by the Fed to cut rates is monetary malpractice,” Vance wrote.

Trump simultaneously posted on Truth Social: “CPI JUST OUT. GREAT NUMBERS! FED SHOULD LOWER ONE FULL POINT. WOULD PAY MUCH LESS INTEREST ON DEBT COMING DUE. SO IMPORTANT!!!”

The Bureau of Labor Statistics reported May CPI increased 2.4% annually, up from April’s 2.3% but below economists’ expectations. Core CPI, excluding volatile food and energy prices, rose 2.8% year-over-year, also below the forecasted 2.9%.

The latest employment data showed 139,000 jobs added in May, exceeding the 130,000 consensus estimate but representing slower growth than April’s revised 147,000 gain.

See Also: Victoria’s Secret Expects $50 Million Tariff Hit In 2025 — CFO Scott Sekella Says Q4 To Bear Largest Dollar Hit

Why It Matters: Fed officials face mounting pressure as tariff-driven inflation concerns clash with cooling labor markets. Chicago Fed President Austan Goolsbee warned that Trump’s fluctuating trade policies create stagflation risks – the “central bank’s worst situation” for monetary policy decisions.

Economists remain divided on Fed strategy, with some advocating immediate July cuts while others support the “wait and see” approach until tariff impacts fully materialize. CME Group’s FedWatch tool shows 99.9% probability of unchanged rates at the June meeting, though September cut odds exceed 60%.

The pressure campaign reflects Trump’s pattern of criticizing Powell, previously calling the Fed “stubborn” and claiming superior knowledge of interest rate policy.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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