Important Interest Announcements from US President Donald Trump and FED Official Bostic! Is a Cut on the Way?

U.S. President Donald Trump reiterated his call for the FED to cut interest rates, criticizing the central bank's decision to keep the federal funds rate unchanged between 4.25% and 4.50%.

The conclusion of the two-day monetary policy meeting of the FED without any adjustment to interest rates led to Trump expressing his dissatisfaction. Trump argued that a rate cut was necessary due to the increasingly evident economic effects of U.S. tariffs.

Meanwhile, Federal Reserve officials, including Atlanta Fed President Raphael Bostic, signaled a more cautious approach. Bostic noted that despite rising concerns among households and businesses, uncertainty about the direction of the economy continues.

Bostic stated that the FED's inflation forecast for this year has not changed significantly and that a return to the 2% target for inflation is not expected until 2027. Warning that the path to lower inflation will be volatile, Bostic described it as "a very bumpy process."

Bostic reiterated that despite speculation about multiple interest rate cuts in 2025, the FED currently only anticipates one interest rate cut this year. Bostic also addressed concerns regarding tariffs, stating that historically these tariffs have led to a one-time increase in prices, but this time the situation might be different.

While the FED continues to act cautiously about making sudden policy changes, Bostic emphasized the critical importance of avoiding a scenario where the central bank lowers interest rates prematurely but then has to reverse course. Bostic also stated that the FED would respond accordingly in the event of a significant weakening of economic conditions.