Trump Confident Fed Will Soon Lower Interest Rates After Powell Meeting

President Donald Trump voiced optimism Friday that the Federal Reserve is preparing to cut interest rates, following a face-to-face meeting with Fed Chair Jerome Powell at the central bank’s headquarters.

Speaking to reporters the day after the visit, Trump described the conversation as productive and said Powell appeared receptive to the idea of monetary easing.

“We had a very positive discussion on interest rates,” Trump said. “He told me the economy is doing well, and I took that as a signal he’s ready to begin recommending rate cuts.”

White House Keeps Pressure on Fed Over Rates and Spending

While Trump’s comments marked a shift toward a more diplomatic tone in his ongoing dialogue with the Fed, his administration continues to apply pressure. Budget Director Russell Vought, who joined the tour of the Fed’s D.C. building renovation project, called for greater oversight of the central bank’s actions both fiscal and monetary.

Vought emphasized that the administration’s concerns extend beyond rates. “There are many questions surrounding how the Fed operates, and we believe those need to be addressed,” he said on CNBC’s Squawk Box. “But this isn’t about pressuring the chairman it’s about transparency and accountability.”

The Fed is currently overseeing a costly renovation project at its headquarters that has drawn scrutiny for its $2.5 billion price tag, and the central bank is also operating under financial strain. In 2024, it ran an $80 billion deficit largely due to the rising interest it pays on bank reserves outpacing its returns from investments.

A Cooling of Tensions?

Despite past friction between the Trump administration and Powell at times sparking public criticism and threats to remove the Fed chair both sides described Thursday’s meeting as cooperative.

A spokesperson for the Federal Reserve issued a rare statement expressing appreciation for Trump’s visit, saying the central bank was “honored” by the president’s engagement and remained “committed to responsibly completing the headquarters renovation.”

Trump, who has toned down his criticism in recent months, even expressed confidence in Powell’s leadership, saying, “I believe he’s going to do the right thing. It might be a little late, but he’ll get there.”

Market Outlook: No Immediate Cuts Expected

Despite Trump’s optimistic forecast, markets are still betting that the Federal Reserve will hold rates steady at its upcoming policy meeting. Futures trading shows little expectation for a cut in July, though some analysts believe easing could begin as early as September if economic conditions soften.

The Fed has kept borrowing costs high in recent months to monitor inflationary trends and gauge the full impact of Trump’s latest round of tariffs on global trade. Powell has previously signaled that the economy remains resilient enough to weather higher rates for now.

Still, Trump reiterated his view that monetary relief is needed. “We’re seeing real strain in housing and other sectors,” he said. “Lowering rates would give the economy the extra lift it needs.”

What Comes Next?

While the Fed remains publicly independent, it’s clear that the political spotlight on its decisions will continue to intensify. Vought confirmed that a broader review of the Federal Reserve’s structure and policies is underway, led by Treasury Secretary Scott Bessent.

“Fed leadership needs to understand that they’re not immune from oversight,” Vought said. “That’s how our system works.”

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