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Trump Urges Rate Cuts as Powell Warns of Tariff-Driven Inflation

The administration is still planning to announce new tariffs on April 2.

By Erika Morphy | March 20, 2025 at 05:01 AM

President Donald Trump and Federal Reserve Chair Jerome Powell have found themselves at odds over interest rates and their impact on the U.S. economy. Trump, in a post on his Truth Social platform, urged the central bank to cut interest rates as tariffs begin to take effect, stating, “The Fed would be MUCH better off CUTTING RATES as U.S. Tariffs start to transition (ease!) their way into the economy. Do the right thing.” This call comes as the Trump administration prepares to unveil a new wave of tariffs, which Powell has indicated could contribute to inflationary pressures.

Powell, following the decision to keep interest rates steady in the 4.25%-4.50% range, highlighted the uncertainty surrounding economic projections. He noted that the current policy environment is marked by “unusually elevated” uncertainty, complicating forecasting.

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