TLDR
- Trump cites Greg Faranello’s prediction of a potential 100 bps Fed rate cut.
- August U.S. jobs report showed only 22,000 new jobs added, missing forecasts.
- CME FedWatch shows a 91% chance of a 25 bps rate cut at the next FOMC meeting.
- Unemployment rate rose to 4.3%, nearing a four-year high.
U.S. President Donald Trump is once again calling for aggressive interest rate cuts ahead of the upcoming Federal Reserve meeting. With markets expecting a possible 25 basis point (bps) cut, Trump has pointed to forecasts suggesting the Fed may eventually opt for a much larger 100 bps cut. His comments come as new economic data raises concerns about a cooling labor market and slowing growth.
Trump References 100 BPS Forecast in New Post
In a Truth Social post, President Trump cited market analyst Greg Faranello, who suggested the Federal Reserve may eventually cut rates by “50, 75, or maybe 100” basis points. Trump referred to Faranello’s remarks to support his long-standing view that the Fed is too slow to act.
Trump also referenced statements from investment expert Jay Hatfield, who said the central bank is “broken” and is using outdated data to shape its policy decisions. Hatfield criticized the Fed’s 2% inflation target as being too rigid and said the institution needs to adopt modern tools for economic analysis.
This is not the first time Trump has publicly criticized Federal Reserve Chairman Jerome Powell. He has repeatedly said Powell waited too long to begin cutting rates and has described his leadership as ineffective.
Market Eyes 25 BPS Cut While Trump Pushes for More
Despite Trump’s call for a deeper cut, current market data shows a strong expectation for a smaller move. According to CME FedWatch, there is a 91% chance of a 25 bps cut at the next Federal Open Market Committee (FOMC) meeting. The odds of a 50 bps cut remain low at 9%, though they briefly rose over the weekend.
Fed Governor Chris Waller recently stated that the central bank could deliver several small cuts over the next few months. He supported a 25 bps move for now and said inflation does not appear to be a major concern at this point.
Trump’s latest statement aims to pressure the central bank ahead of its decision. His post also comes as the White House and financial markets watch closely for new inflation and labor data, which may influence the Fed’s course.
Weak Jobs Report Fuels Rate Cut Talk
The August jobs report released last week showed a slowdown in hiring. The U.S. economy added only 22,000 jobs, falling well short of the expected 75,000. The unemployment rate also rose to 4.3%, which is now nearing a four-year high.
At the recent Jackson Hole symposium, Powell acknowledged that risks to the labor market are growing. He signaled that the Fed may begin cutting rates soon if economic conditions continue to weaken.
The Producer Price Index (PPI) and Consumer Price Index (CPI) data are set to be released before the FOMC meeting. These reports are likely to play a key role in determining the size of the next rate cut. Market analysts will be watching closely to see if inflation remains steady or shows signs of decline.
Trump’s comments appear aimed at shifting sentiment toward more aggressive rate cuts. However, the Fed has continued to signal caution and is expected to move gradually unless data forces a change.
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