Trump Wants the Fed to Cut Interest Rates by a Full Point. That Normally Takes a Recession

President Donald Trump renewed his calls on the Federal Reserve to lower its benchmark interest rate Friday, and this time, he had a specific (and huge) ask in mind. 

In a series of social media posts Friday morning, Trump pointed to the economy’s recent track record of solid job growth and cooling inflation, and taunted Federal Reserve Chair Jerome Powell for not having lowered interest rates sooner. Trump said the central bank should lower its influential fed funds rate by “a full point,” saying it would be economic “Rocket Fuel!”

The Fed adjusts its fed funds rate, which influences borrowing costs on all kinds of loans, to keep inflation down and employment high.

Fed officials have kept their rate higher than usual so far this year in an effort to push inflation down to its goal of a 2% annual rate. Officials said they are waiting to see what happens in the economy because they are concerned Trump’s tariffs could push up prices and set off a fresh round of inflation.

The Fed’s cautious approach has angered Trump, who wants rate cuts and the economic growth they could promote. A full percentage point cut would be a major move by the Fed and would bring the fed funds rate to a range of 3.25% to 3.5%, its lowest since September 2022.

The Fed typically moves rates a quarter-point at a time. The last time the Fed cut rates an entire percentage point was March 2020, when it was evident that the onset of the COVID-19 pandemic would thrash the economy. Before that, the Fed cut an entire point in December 2008, during the Great Recession.

Why Trump Says Powell Is ‘Too Late’

The posts were the latest moves in Trump’s pressure campaign to influence the Fed’s decision-making about monetary policy. The central bank is designed to be insulated from politics, and Powell has said the Fed’s decisions will be based only on economic considerations.

Trump has repeatedly criticized Powell for not lowering interest rates, in contrast to the Fed’s European counterpart. The European Central Bank has cut rates eight times since last June. The Fed cut rates three times over that time period, including a jumbo half-point cut in September, but has kept rates flat.