Recent weak economic reports are raising concerns that the labour market may slide into a deeper slowdown, threatening consumer spending and growth
[NEW YORK] US President Donald Trump predicted a “big cut” from the Federal Reserve this week ahead of a pivotal meeting at which the central bank’s governors are expected to ease policy for the first time in nine months.
“I think you have a big cut,” Trump told reporters on Sunday (Sep 14) on his way back to Washington. “It’s perfect for cutting.”
The Fed is widely expected to cut interest rates on Sep 17 as it grapples with a slowing labour market, stubborn inflation and an unprecedented push by Trump for lower borrowing costs. The median estimate from a Bloomberg survey of economists is for a 25 basis-point reduction.
Trump has been putting pressure for months on Fed chair Jerome Powell to cut rates and repeatedly encouraged him to resign.
Recent weak economic reports are raising concerns that the labour market may slide into a deeper slowdown, threatening consumer spending and growth. At the same time, inflation remains above the Fed’s 2 per cent goal and could rise further if tariffs push up costs, leaving some officials cautious about acting too quickly.
Powell’s term is set to end on May 2026 and Trump is in the process of deciding on his successor. The president has publicly White House economic adviser Kevin Hassett, Fed governor Christopher Waller and former Fed governor Kevin Warsh as three top candidates. BLOOMBERG
