Fed’s Major Decision Imminent: Trump Predicts “Big Rate Cut” This Week!

As the Federal Reserve’s decision approaches, former U.S. President Donald Trump stated on September 14 local time that he expects the Fed to announce a “big rate cut” at this week’s meeting.

If the Fed decides to cut rates this week, it would be the first rate cut since December last year. The Fed initiated its first rate cut since March 2020 in September last year. Subsequently, it cut rates three times, totaling 100 basis points, with a 50-basis-point cut in September and 25-basis-point cuts in November and December. However, due to concerns over Trump’s tariff policies, the Fed has held rates steady this year.

Despite persistently high inflation in the U.S., the slowing labor market has led to widespread expectations that the Fed will cut rates this week.

Recent weak economic reports have raised concerns that the job market may slow further, threatening consumer spending and economic growth. At the same time, inflation remains above the Fed’s 2% target, and if tariffs push costs higher, inflation could rise further, leading some Fed officials to caution against cutting rates too quickly.

Currently, the Fed is facing unprecedented pressure from Trump to cut rates. For months, Trump has been pressuring Fed Chair Powell to lower rates. Last week, Trump posted on his social media platform Truth Social that the U.S. has “no inflation” and that the Fed “must cut rates big immediately,” calling Powell a “complete disaster.”

Recently, Trump escalated his battle with the Fed by ordering the dismissal of Fed Governor Cook, though the order’s prospects remain uncertain due to legal challenges.

The current target range for the U.S. federal funds rate is 4.25%-4.50%. Trump has repeatedly stated that U.S. interest rates are at least 300 basis points too high and should be reduced to around 1%.