Trump Says Fed Chair Powell 'Will Probably Blow It Again' — Here's What Markets Expect On Rate Cuts

Fresh out of his Middle East tour, President Donald Trump continued to bash Jerome Powell after the Federal Reserve chief stuck to his "data-dependent" stance.

In a new post on his Truth Social account, Trump expressed his frustration with the central bank chief's decision to stay put. He repeated his call for a cut in the Fed funds rate.

He wrote in his typical all-caps style, "THE FED SHOULD CUT RATES SOONER, RATHER THAN LATER."

The futures market currently prices in an 88.2% probability of a rate cut at the next rate-setting meeting, which is scheduled for June 17-18. 

While elaborating on the central bank's stance after announcing an unchanged stance at the May meeting, Powell said, "It's not a situation where we can be preemptive, because we actually don't know what the right responses to the data will be until we see more data."

The April inflation report released last week came in tamer than expected, prompting Trump to call for immediate rate cuts. He also pointed to the rest of the major central banks moving preemptively and lowering rates.

In his recent post, Trump called the Fed chief "a man legendary for being Too Late, will probably blow it again—but who knows???"

Commenting on the May decision, JPMorgan Wealth Management Global Investment Strategist Vinny Amaru said, "The Fed's recent statement emphasized that the economy continues to expand at a moderate rate despite some recent trade data anomalies, mostly due to the likely front-loading of imports ahead of potential tariffs."

JPMorgan believes an uptick in unemployment might require rate reductions, while elevated inflation could call for the opposite approach. "This delicate balancing act may become a focal point for Fed policy decisions in the second half of the year," the firm said.

In his weekly commentary, WisdomTree Senior Economist Jeremy Siegel said long-term inflation expectations suggest upside inflation risks were not entrenched, making the Fed's view less defensible.

He also sees political pressure on the Fed escalating. "Trump's complaints against 'too late' Powell will amplify as the economy weakens, even if it's the result of Trump's tariffs," the economist said.

Last month, Trump and his administration took up cudgels against Powell and signaled their intention to move him out of his office before his term expires. With the market reacting negatively to these comments, they have since toned down the rhetoric.

The Invesco QQQ Trust (QQQ) ETF, an exchange-traded fund (ETF) that tracks the Nasdaq 100 Index, is up 2.2% for the year, while the broader SPDR S&P 500 ETF (SPY) has gained 1.7%.

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