Trump Hammers Fed Over ‘Tiny’ Rate Cut, Demands Bigger Slashes

Donald Trump didn’t hold back after the Federal Reserve’s latest move. He called their quarter-point cut to 3.6 percent “rather small” and said it should’ve been at least double that. Straight from a White House meeting with CEOs, as CNBC covered, Trump labeled Fed Chair Jerome Powell “a stiff” and pushed for rates “much lower” to fuel growth.

Trump’s beef boils down to this: the Fed’s too scared of inflation and choking the economy. “They’re so afraid of inflation that they kill the growth,” he said, per Newsweek. He argues you can have “tremendous growth without inflation” and deal with price hikes later if they pop up. Makes sense when jobs are cooling—unemployment hit 4.4 percent, the highest in four years, and monthly job gains dropped to 40,000 since April, maybe even less after revisions.

Fed’s Cautious Step

This was the third straight cut, but the Fed signaled a pause ahead, Newsweek reports. Their rate-setting committee expects just one more reduction in 2026, according to quarterly projections. Powell called it a “close call” that lets them watch data on jobs and inflation, which sits at 2.8 percent on their preferred gauge. He pointed fingers at Trump’s tariffs for pushing goods inflation higher.

Lower rates should ease mortgages, car loans, and credit cards eventually, but market forces play in too. Stocks liked it anyway—S&P 500 jumped 0.7 percent, as Fortune noted.

Splits Inside the Fed

Deep cracks showed up: three dissents, most in six years. Two wanted no cut—Kansas City’s Jeffrey Schmid and Chicago’s Austan Goolsbee. Trump’s appointee Stephen Miran pushed for a half-point drop. Projections split wild: seven see zero cuts next year, eight want two or more, four say one. Only 12 vote on rates.

Unemployment up three months to 4.4%
Inflation cooled but still above 2% target
Consumer prices up 25% since 2020
Government shutdown delayed data

Trump’s Next Moves

Powell’s term ends May 2026, and Trump could name a replacement soon—maybe as early as this month, the New York Times reports. He’s eyeing Kevin Warsh for an interview and likes Kevin Hassett, who backs lower rates but says watch the data, Politico notes. A Supreme Court case in January might let Trump boot another governor too. Powell wants to hand off a strong economy: inflation back to 2 percent, solid jobs.

Trump’s shoving hard for aggressive cuts fits his growth-first style, but the Fed’s holding back on sticky inflation and shaky hires. Data backlog from the shutdown adds fog. If jobs tank more, cuts could come; if not, steady rates. Trump’s got leverage picking the next chair—bet on friendlier policy soon.