This statement comes just before Wash's first chairing of the FOMC meeting (June 16-17), and amid strong employment data that has raised market expectations for interest rate hikes.

Written by: Long Yue

Source: Wall Street Journal

On the eve of Wash's first Federal Reserve meeting, Trump openly pressured the central bank head he personally nominated, demanding a rate cut.

In an interview on NBC's Meet the Press on Sunday, Trump stated clearly: "There is no reason to raise interest rates." He said, "We built this country by doing things right and keeping interest rates low. When they raise rates, they are trying to kill success. I don't want to kill success. We should actually cut rates."

Trump seemingly gave Wash room to operate, but his words carried an underlying message. "Kevin is outstanding, I hope he acts on his own judgment," he said, "but my feeling is that when a country is doing well, we should not raise rates immediately to punish it, but rather incentivize it."

Wash was officially confirmed last month as Chair of the Federal Reserve and will preside over his first Federal Open Market Committee (FOMC) meeting from June 16 to 17.

The timing of Trump's statement is quite sensitive. Just last Friday, a strong employment report was released, indicating that the U.S. labor market is stabilizing after a tumultuous 2025, prompting the market to increase bets that the Federal Reserve may be forced to raise interest rates within the year to address inflation pressures.

Inflation pressure is real, and there are already "hawkish" voices within the Fed

The root of rising inflation lies in the Middle East war. Iran's blockade of the Strait of Hormuz at the outbreak of the war caused a significant rise in oil prices, and this price pressure has spread across the entire U.S. economy. In April, the U.S. inflation rate rose to 3.8%, a three-year high. Economists surveyed by Bloomberg predict that the May data, to be released this Wednesday, will further rise to 4.2%.

Officials within the Federal Reserve have already expressed concerns publicly. Cleveland Fed President and FOMC member Beth Hammack stated on Friday: "If the recent trend continues, action may be needed soon." She pointed out that the latest employment report shows that the labor market is "roughly balanced," while "high inflation is the greater hazard."

Secretary of the Treasury Baset's stance is relatively mild; he stated that it is reasonable for the Federal Reserve to wait for the war's impact on inflation to become "more clear" before making further rate cuts.

Trump's logic: Good economy should not be punished

In the face of this situation, Trump's attitude is: the better the economy, the less it should be punished with rate hikes.

"We're doing great, but every time you're doing well, they want to raise rates, that's not fair," he said, "it should be the other way around."

Trump has repeatedly demanded that the Federal Reserve's benchmark interest rate—currently in the range of 3.5% to 3.75%—be significantly reduced to 1% or even lower. He has also repeatedly criticized Wash's predecessor Powell, calling him an "idiot" and a "fool," for not cutting rates quickly enough.

Regarding Wash, Trump has superficially given ample space, but his words imply more. "Kevin is outstanding, I hope he acts on his own judgment. I don’t want to influence him too much," he told NBC, "but my feeling is that when a country is doing well, we should not immediately raise rates to punish it, but rather incentivize it."

Wash had previously indicated a tendency to lower borrowing costs, but the surge in inflation following the outbreak of the Middle Eastern conflict has led some FOMC members to begin discussing the possibility of raising rates.