President Donald Trump has said he wants interest rates cut immediately

President Donald Trump said on Thursday that he would push to lower interest rates.

Addressing a gathering of world leaders at the World Economic Forum in Davos, Switzerland, the new president delivered a wide-ranging policy speech that made it clear he wanted lower rates, though he did not mention the Fed by name.

“I’m calling for an immediate cut in interest rates,” Trump said. “And by the same token, they should be going down around the world. Interest rates should follow us.”

The comments represent a first strike with federal officials who have had a highly contentious relationship during their early years in office. Trump has repeatedly criticized Chairman Jerome Powell, his appointee, calling policymakers “boneheads” and comparing Powell to an incompetent golfer.

Stocks barely reacted to the statement, though the policy-sensitive 2-year Treasury yield fell to 4.29 percent.

He did not discuss his views on monetary policy amid the turmoil surrounding the president’s first week in office. However, during the presidential campaign, Trump indicated that he should get input on interest rate decisions.

Powell and his colleagues emphasized the importance of federal independence. Powell, in particular, has repeatedly said that the central bank does not make decisions based on political considerations. Although Trump appoints members to the Board of Governors, he has no legal authority over the Fed.

Although the central bank has been criticized in recent years for calling the 2021 rate hike a “transition,” the Fed’s liberalism, which has led to a series of sharp hikes, is seen as essential to stable markets.

Trump’s comments come less than a week before the Fed’s two-day policy meeting ends on Wednesday.

Following a full percentage reduction in the last four months of 2024, they have given almost no chance to further lower the federal lending rate, which is targeting a range of 4.25%-4.5%. Traders price. According to CME Group data, the first phase of the reduction is expected in June and a 50-50 chance of another move before the end of the year.

The Fed cut the funds rate after raising it by 5.25 percentage points in an effort to fight inflation. Although inflation is running above the Fed’s 2% target, officials say policy may not need to be so restrictive as they look to moderate the pace of inflation.

Trump blamed former President Joe Biden on “deficit spending” for inflation.

“The result is the worst inflation in modern history and high interest rates for our citizens and even for the whole world. The price of food and almost everything known to man has gone through the roof,” he said.

Federal officials declined to comment on Trump’s comments.