U.S. Vice President JD Vance speaks, during a tour of Nucor Steel Berkeley in Huger, South Carolina, U.S., May 1, 2025.
Kevin Lamarque | Reuters
President Donald Trump and Vice President JD Vance are now double-teaming the Federal Reserve in an effort to get lower interest rates.
In a social media post Wednesday morning on X, Vance echoed his boss' urging that the central bank ease monetary policy, after the latest inflation readings showed that tariffs are yet to exert any substantial upward pressure on inflation.
“The president has been saying this for a while, but it's even more clear: the refusal by the Fed to cut rates is monetary malpractice,” Vance wrote.
The statement followed a Bureau of Labor Statistics report showing that the consumer price index increased just 0.1% both on the all-items reading and the core that excludes food and energy. On an annual basis, the respective inflation levels stood at 2.4% and 2.8%, both above the Fed's 2% goal.
While Trump had yet to address the CPI numbers himself Wednesday, the president has been badgering Chair Jerome Powell and his cohorts on the Federal Open Market Committee to cut rates. The Fed last eased in December, and officials lately have expressed concern over the longer-term impacts that tariffs will have on prices. Trump has said he wants a full percentage point cut from the current target level for the fed funds rate at 4.25%-4.5%.
The FOMC will release its interest rate decision in a week, and markets are assigning zero probability of a rate cut following the two-day meeting. Traders expect the Fed to ease in September, according to CME Group data.
Administration officials have emphasized the easing inflation data as well as a moderating labor market as reasons to lower rates.
“To me, that combination says it may be time for another rate cut, but I expect the Fed to emphasize the ongoing uncertainty and a desire to not act too early. It's a tough spot,” said Elyse Ausenbaugh, head of investment strategy at J.P. Morgan Wealth Management.
