Trump urges Fed to cut rates as tariffs cause stock plunge

President Trump urged the Federal Reserve on Friday to cut interest rates and ripped the head of the independent central bank as new tariffs caused stocks to plunge.

In a post on his Truth Social messaging platform, Trump accused Fed Chair Jerome Powell — a fellow Republican — of refusing to cut interest rates for political reasons.

“This would be a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates. He is always “late,” but he could now change his image, and quickly,” Trump wrote.

Trump then claimed the prices of several food and energy products had already fallen since he took office, even as inflation as remained close to 3 percent.

“A BIG WIN for America. CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!” Trump wrote.

Trump’s post is a major escalation of his pressure on the Fed to cut interest rates, which could ease pressure on the stock market as investors brace for the impact of the president’s tariffs.

The Dow Jones Industrial Average was down more than 1,000 points shortly after 11 a.m. EDT Friday after losing close to 1,700 points Thursday. The Nasdaq composite and S&P 500 index were also down more than 3 percent Friday morning, a day after all three indexes suffered their worst single-day losses since 2020.

In a speech to a business journalism conference shortly after Trump’s post, Powell warned that both the new tariffs and their likely economic blowback exceeded expectations.

“It is now becoming clear that the tariff increases will be significantly larger than expected. The same is likely to be true of the economic effects, which will include higher inflation and slower growth,” Powell said.

Powell also warned that the new tariffs could cause both short- and long-term increases in inflation, which has plateaued above the Fed’s target level for months.

Updated at 11:39 a.m. EDT.