Trump Urges Fed Rate Cut, Jobs Data Casts Doubt
Trump Pushes for Fed Rate Cut Amid Strong Jobs Data
President Trump recently renewed his calls for the Federal Reserve to lower interest rates. However, robust April employment figures have significantly reduced the likelihood of a rate cut in June, according to Nick Timiraos of the Wall Street Journal, often considered the "Fed's mouthpiece."
Key Economic Indicators
- The next Fed meeting is scheduled for May 6-7, 2025, with economists largely anticipating no change to the federal funds rate (currently 4.25% to 4.5%).
- The June 18th meeting will be the next key date for potential rate adjustments. Only one more jobs report will be released before then.
- April's non-farm payrolls increased by 177,000, exceeding market projections. The unemployment rate remained steady at 4.2%.
- Job growth was particularly strong in healthcare, transportation, finance, and social assistance.
The Fed typically relies on monthly employment data to assess economic health. April's positive report lessens the pressure for immediate monetary easing, despite uncertainties like the impact of renewed tariffs.
Market expectations for a June rate cut have decreased from approximately 58% to 40% following the April jobs report, according to the CME FedWatch tool. Currently, investors assign about a 60% probability to the Fed holding rates steady.
Trump's Perspective
In a statement, Trump argued against a rate increase, claiming "no inflation" and citing falling gasoline and grocery prices, reduced energy costs, declining mortgage rates, and robust employment as signs of economic stabilization. He believes the Fed should swiftly cut rates to fuel further economic growth.
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