Trump says it's a 'PERFECT' time for Fed Chair Powell to cut interest rates—Powell says tariffs will raise inflation

President Donald Trump said on Friday that it would be the "perfect" time for Federal Reserve Chairman Jerome Powell to cut the interest rates while Powell said that the tariffs imposed by Trump this week will raise inflation. 

Trump posted on Truth Social, "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. Energy prices are down, Interest Rates are down, Inflation is down, even Eggs are down 69%, and Jobs are UP, all within two months - A BIG WIN for America. CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!"

The post from Trump comes after announcing a number of reciprocal tariffs against different countries earlier this week. In response to Trump’s post, Powell told reporters in Virginia that the Fed is “well positioned to wait for greater clarity,” according to CNBC.

“Our obligation is to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem,” Powell told reporters. “We are well positioned to wait for greater clarity before considering any adjustments to our policy stance. It is too soon to say what will be the appropriate path for monetary policy.”

“We face a highly uncertain outlook with elevated risks of both higher unemployment and higher inflation,” Powell added. “While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent.”

The Dow Jones and S&P 500 fell sharply in reaction to the tariff announcement from Trump as countries have been adjusting their markets. Some nations have indicated that they will be pulling back their tariffs while others have pledged to increase their own trade barriers against the US. The president has indicated that he will lower the reciprocal tariffs against other countries if they remove their own tariffs on US goods.