Elizabeth Warren Says Americans 'Deserve' Lower Interest Rates, But Trump's 'Reckless' Tariffs Stand In The Way: 'The Fed Is Getting Boxed Out'

Sen. Elizabeth Warren (D-Mass.) criticized President Donald Trump‘s tariff policies on Wednesday, arguing they prevent the Federal Reserve from delivering the lower interest rates Americans need.

What Happened: “Americans deserve lower interest rates and lower costs, but Donald Trump and his reckless tariffs are standing in the way of that relief,” Warren wrote on X. “The Fed is getting boxed out by the President’s chaotic economic policies.”

Warren’s comments follow the Fed’s decision to hold rates at 4.25%-4.50% for the fourth consecutive meeting. Fed Chair Jerome Powell cited tariff-induced inflation concerns as a key factor preventing rate cuts.

The Fed raised its core Personal Consumption Expenditure inflation forecast to 3.1% for 2025, up from 2.8% in March. Powell directly attributed this increase to tariff effects, noting “we’re beginning to see some effects” on goods prices, particularly personal computers and audiovisual equipment.

Powell said business surveys indicate “many companies do expect to put all or some of the effect of tariffs through to the next person in the chain. And ultimately, to the consumer.”

Why It Matters: The Fed’s dot plot maintains expectations for two rate cuts in 2025, unchanged from March projections. However, 2026 expectations dropped to two cuts from three previously.

Markets initially declined during Powell’s press conference, with the Nasdaq 100 tracked by Invesco QQQ Trust QQQ dropping 180 points from session highs before recovering on Trump’s Middle East comments.

Warren previously clashed with Trump over his “One Big Beautiful Bill,” which the Congressional Budget Office estimates would add $2.4 trillion to the national debt over 10 years while potentially removing health coverage from 16 million Americans.

The Fed projects real GDP growth at 1.4% in 2025, down from 1.7% in March, while unemployment is expected to rise to 4.5%. Powell emphasized there’s “no rush” to ease policy given current economic uncertainties.

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