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On Wednesday, Donald Trump criticized an inflation report that exceeded expectations, dubbing it “Biden inflation” while reiterating his call to lower interest rates.
His remarks followed the release of data indicating that the consumer price index had risen more than anticipated, leading him to declare “BIDEN INFLATION UP!” in a post on Truth Social.
This statement was made shortly after another post that urged for a decrease in interest rates, suggesting that this move should coincide with upcoming tariffs. “Let’s Rock and Roll, America!” Trump exclaimed, though it was uncertain which specific interest rates he was referring to, including options like the Federal Reserve’s short-term rate or various loan rates.
The timing of Trump’s posts coincided with the 8:30 AM ET release of the latest data from the Bureau of Labor Statistics, which showed that the Consumer Price Index (CPI) increased by 3.0% compared to the previous year—a slight rise from the 2.9% increase recorded in December.
Trump’s rapid commentary on interest rates, tariffs, and inflation came in the wake of Federal Reserve Chairman Jerome Powell’s statement to lawmakers on Tuesday, indicating that there was no rush to adjust interest rates.
The uptick in inflation may complicate the Federal Reserve’s decision-making process regarding potential reductions in its benchmark federal funds rate, particularly as market expectations already suggested that significant rate cuts would be unlikely until later this year or possibly in the winter of the following year.
Additionally, Trump’s reference to tariffs followed the announcement of new 25% tariffs on steel and aluminum, with plans for further reciprocal tariffs expected to be revealed soon.
The emphasis on interest rates also echoed discussions from an Oval Office meeting on Tuesday afternoon, where Trump anticipated that Elon Musk would help identify significant spending cuts through a newly established Department of Government Efficiency.
Musk claimed that the expected cost reductions and deregulations could lead to zero inflation and decreased interest rates, presenting a scenario where prices in grocery stores would remain consistent year over year, alongside declining debt obligations.
Source
finance.yahoo.com