Trump calls Fed Chair Powell a “numbskull” while pushing for interest rate cut.

In a scathing attack, President Donald Trump labeled Federal Reserve Chair Jerome Powell a "numbskull" on Thursday, intensifying his pressure on the central bank chief to lower interest rates. The president's verbal assault came as he claimed that reducing rates by 2 percentage points would save the US $600 billion per year, but lamented that Powell is unwilling to take such action. Trump's remarks, made at the White House, underscore his growing frustration with the Fed's monetary policy and his desire to stimulate economic growth through rate cuts. The president's criticism of Powell is not an isolated incident, but rather part of a broader campaign by the Trump administration to influence the Fed's decision-making. Earlier on Wednesday, Commerce Secretary Howard Lutnick urged Powell to cut interest rates, arguing that the economy is ready for such a move and that inflation is low. Vice President JD Vance also weighed in, calling the Fed's refusal to cut rates "monetary malpractice" in a social media post. These comments suggest that the administration is ramping up its pressure on the Fed to adopt a more dovish monetary policy. Despite the administration's efforts, markets remain skeptical about the likelihood of a rate cut in the near future. Traders have priced in virtually no chance of a cut at the Fed's meeting next week and little chance of a move in July. However, the odds of a cut in September have increased, with traders assigning a 76% chance of such a move, up from 69% a day ago. The Fed's decision will likely depend on its assessment of the economy's performance and inflation trends, rather than political pressure from the administration. The Labor Department's recent report that US producer prices rose less than expected in May may have alleviated some concerns about inflation, but it is unclear whether this will be enough to prompt the Fed to cut rates. Trump's attack on Powell also raises questions about the independence of the Fed and the limits of presidential power. The president has previously threatened to fire Powell, but backed down after a bout of market volatility. On Thursday, Trump repeated that he is "not going to fire" Powell, but added that he is unsure why it would be problematic to do so. However, Powell has stated that the law does not permit the president to fire him, and the Supreme Court has suggested that Fed governors have more protection against termination than other federal agency heads. As the debate over monetary policy continues, the relationship between the administration and the Fed will be closely watched, with potential implications for the economy and the markets. The ongoing tension between the Trump administration and the Fed highlights the challenges of navigating monetary policy in a highly politicized environment. As the president continues to push for rate cuts, the Fed must balance its dual mandate of maximizing employment and stabilizing prices with the need to maintain its independence and credibility. The outcome of this debate will have significant implications for the US economy, and the world will be watching as the situation unfolds. Ultimately, the Fed's decision will depend on its assessment of the economic data and its commitment to its mandate, rather than political pressure from the administration.