President Donald Trump on Tuesday touted the release of fresh inflation data from December that showed price growth has held steady, saying that trend supports his calls for the Federal Reserve to lower interest rates.
The Bureau of Labor Statistics released the consumer price index (CPI) for December, which showed that headline inflation was up 2.7% from a year ago, while core CPI, which excludes volatile food and energy prices, came in at 2.6%. Headline inflation was in line with the expectations of economists polled by LSEG, while core inflation was slightly lower than the 2.7% estimate.
While those inflation figures remain above the Fed’s 2% long-run target for inflation, the president said that he thinks inflation is low enough to justify cutting interest rates and reiterated his calls for Fed Chair Jerome Powell to lower rates.
“We have very low inflation. That would give ‘too late Powell’ the chance to give us a nice beautiful big rate cut,” Trump told reporters before departing Washington for an economic event in Detroit.
INFLATION HELD STEADY IN DECEMBER, REMAINING WELL ABOVE THE FED’S 2% TARGET
During his speech in Detroit, Trump said that mortgage rates are declining and “that’s not with the help of the Fed.”
“If I had the help of the Fed, it would be easier, but that jerk will be gone soon,” Trump said of Powell. He later added that “when the market goes up, they should lower rates.”
Earlier in the day, Trump said in a post on Truth Social: “Great (LOW!) Inflation numbers for the USA. That means that Jerome ‘Too Late’ Powell should cut interest rates, MEANINGFULLY!!! If he doesn’t he will just continue to be, ‘TOO LATE!'”
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The president’s call for interest rate cuts and his continued criticism of Powell, who has served as Fed chair since 2018 following his nomination to the role by Trump, comes as the Department of Justice is pursuing a criminal probe into whether Powell lied to Congress about the Federal Reserve’s headquarters renovation.
Powell revealed that the Fed was served with subpoenas related to a criminal probe by federal prosecutors on Friday, saying in a Sunday video statement that investigations into the renovation project and his congressional testimony “are pretexts” for pressuring the Fed to cut interest rates.
“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President,” Powell said. “This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions – or whether instead monetary policy will be directed by political pressure or intimidation.”
FORMER FED CHAIRS, TREASURY SECRETARIES DEFEND JEROME POWELL AMID TRUMP DOJ’S CRIMINAL PROBE
Inflation has remained above the Fed’s 2% target for nearly five years, as the last monthly CPI reading with headline inflation under that threshold dates back to February 2021.
Price growth peaked at 9.1% in June 2022 but has trended closer to target over the last few years. In 2025, inflation reached a low of 2.3% in April – the lowest level in four years – before rebounding to 3% by September as businesses passed through higher costs stemming from the president’s tariffs onto consumers.
The latest CPI inflation report shows that inflation remains well above the Fed’s 2% target, and the market doesn’t expect policymakers to adhere to the president’s calls for rate cuts at their next meeting.
The CME FedWatch tool shows a 97.2% probability that the Fed will leave rates unchanged at the current target range of 3.5% to 3.75%. That figure is up from 95.6% yesterday and 82.3% last week.
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