Too Late Jerome? Or Too Fast Trump?

By

Joe Patey, Economic Writer

President Trump’s recent Truth Social post scolds Fed Chair Jerome Powell, accusing the Fed of being “too late and wrong” in cutting interest rates, while the ECB moves more aggressively in Europe.


But who is in the right? Is Powell behind the curve? Or is Trump being Impatient? Inflation in the U.S. has eased, with oil and food prices stabilising. However, core inflation — especially in services — remains sticky. The Fed has kept interest rates elevated to avoid a premature move that could reignite price pressures. It’s a cautious, credibility-first approach. But here is where politics and policy come into play.

Trump’s economic strategy depends on aggressive protectionism. We can see this with his administration’s introduction of reciprocal tariffs, aiming to make the U.S. “rich on tariffs” by collecting huge amounts of revenue and reducing trade deficits. Although this approach seeks to strengthen the domestic industry, there are side effects as tariffs tend to raise consumer prices and weaken trade ties.

So why would Trump want rate cuts now?

To offset recession risk: Tariffs restrict trade, which can slow growth. Lower rates stimulate demand. To weaken the dollar: Makes U.S. exports more competitive and aligns with a nationalist manufacturing agenda. To support markets: Lower rates typically boost equities — useful politically, and economically.

In this context, rate cuts don’t just fit economic theory; they fit Trump’s broader playbook.
But Powell’s job isn’t to follow politics. The Fed’s purpose is to manage inflation and employment with long-term stability in mind. Cutting too early could damage the Fed’s credibility and hurt the very people the policy is meant to help, especially if inflation flares back up.

So, is Trump right? From a growth-first, tariff-heavy agenda: yes, rate cuts align. But from a central banker’s perspective, caution is necessary. The real question isn’t whether Powell is too late. It’s whether politics should dictate monetary policy at all.

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