Particle.news

Download on the App Store

White House Steps Up Pressure on Fed for Rate Cuts After May Inflation Eases

The administration is calling the Fed’s reluctance to lower borrowing costs a policy failure after May’s inflation report showed a smaller-than-expected price increase.

Image
Image
Image
Image

Overview

  • May’s consumer price index rose just 0.1 percent versus the 0.2 percent analysts forecast and recorded an annual gain of 2.4 percent, slightly above the Fed’s 2 percent goal.
  • Vice President JD Vance blasted the Fed on X as committing “monetary malpractice” by holding rates steady, echoing President Trump’s sustained demands for cuts.
  • President Trump has accused Chair Jerome Powell of politicizing monetary policy, citing past rate cuts ahead of the 2024 election.
  • Fed officials’ March projections still envisage at least two rate reductions this year, but policymakers are maintaining their current stance for now.
  • Markets have largely priced in a September rate cut, although many economists doubt significant easing will occur before December.