Trump Pressures Fed As ECB Delivers 7th Straight Rate Cut

The European Central Bank cut interest rates for the seventh straight time Thursday, lowering its key rate to 2.25% in a move anticipated by President Donald Trump, who seized the moment to launch a fresh attack on Fed Chair Jerome Powell.

In a post published Thursday morning on Truth Social, Trump predicted the ECB would slash rates again, calling out Powell for falling behind his European counterpart. "The ECB is expected to cut interest rates for the 7th time," Trump wrote.

Trump added that "Too Late" Jerome Powell, who he claimed is consistently late and wrong, released yet another report that he called a typical, total “mess”—despite falling oil and grocery prices and increasing U.S. tariff revenues.

The president went as far as calling for Powell's removal, saying, "Powell’s termination cannot come fast enough!"

ECB Slashes Interest Rates As Trade Tensions Weigh On Outlook

The ECB justified the 25-basis-point reduction citing both progress on disinflation and heightened economic uncertainty tied to trade tensions, a direct nod to ongoing U.S. tariff policies.

"The disinflation process is well on track. Inflation has continued to develop as staff expected," the central bank said in its statement, adding that volatility in financial markets and weaker confidence among firms and households could further drag euro-area growth.

“The adverse and volatile market response to the trade tensions is likely to have a tightening impact on financing conditions,” Frankfurt stated.

Powell, speaking a day earlier at the Economic Club of Chicago, took a more cautious stance. While acknowledging inflationary risks tied to new tariffs and a weakening growth outlook, he said the Fed is in no rush to adjust interest rates at this stage.

He emphasized that market volatility, which has surged in recent sessions, falls outside the central bank's mandate.

Asked whether the Fed would intervene to curb market volatility—a concept often referred to as the "Fed put"—Powell said, "I’m going to say no," adding that such action falls outside the central bank's mandate as long as markets are functioning in an orderly manner.

Read also: Stocks Sink As Powell Dismisses ‘Fed Put’ Safety Net, Gold Extends Massive Lead Over Nasdaq

Trump Ramps Up Trade Momentum

Trump also pointed to progress on the trade front, claiming improving momentum across multiple negotiations.

"Had a very productive call with the President of Mexico yesterday," he wrote. "Likewise, I met with the highest level Japanese Trade Representatives… Every Nation, including China, wants to meet! Today, Italy!"

U.S. equity futures rebounded early Thursday in New York, trimming Wednesday's steep losses.

Contracts on the tech-heavy Nasdaq 100 gained 0.8% in premarket trading, after the index dropped 3% in the prior session. Futures on the S&P 500 rose as well by 0.6%, after the SPDR S&P 500 ETF Trust SPY fell 2.2% Wednesday.

Gold erased earlier losses and surged to $3,330 per ounce as investors sought safety amid policy uncertainty.

In currency markets, the euro changed hands at 1.1350 dollars, down 0.4%.

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