Trump's Rate Cut Rant Ignores Inflation Reality
President Donald Trump has once again criticized the Federal Reserve for not cutting interest rates quickly enough. However, his argument misses the point that persistently elevated inflation, driven by his own tariffs and the Iran war, makes rate cuts highly unlikely.
The current federal funds target rate is between 3.50% and 3.75%, which was lowered six times between September 2024 and December 2025 by former Fed Chair Jerome Powell and the FOMC.
Trump's tariffs have increased production costs for businesses, which are then passed to consumers, contributing to inflation. The Iran war also led to a historic energy supply disruption, causing fuel prices to soar.
Core Personal Consumption Expenditures (PCE) is forecast to hover around 3.3% in July and August, indicating that Trumpflation has entrenched itself in the broader economy.