President Donald Trump on Wednesday continued to pressure the Federal Reserve and the central bank’s chairman to lower interest rates, saying the central bank hiked rates "too fast" and has let the nation down as a result.
“The Federal Reserve has let us down,” Trump told reporters outside the White House, adding that the nation’s central bank should “get smart and reduce interest rates like many other places around the world that we have to compete with.”
The comments by Trump, who has repeatedly criticized the Fed’s policies, come as he seeks to downplay worries that a trade war between the United States and China could weigh on the U.S. economy and trigger a possible recession before the November 2020 presidential election.
Trump said the U.S. economy “is the strongest in the world, by far nothing even close and a lot of good things are happening. We had some very good retail numbers this morning.”
Wall Street’s main indexes rose about 1% on Wednesday, as upbeat earnings from retailers Lowe’s and Target reinforced confidence in consumer demand, while investors awaited the release of the Fed minutes for further clues on the path of interest rate cuts.
Big-box retailer Target Corp (TGT.N) surged 19.5%, set for its biggest one-day percentage jump, after it raised its annual earnings forecast. Home improvement chain Lowe’s Cos Inc (LOW.N) climbed 9.8% as it joined bigger rival Home Depot Inc (HD.N) in beating profit estimates, Reuters explained.
The reports come on the heels of solid earnings from Walmart Inc (WMT.N) and strong retail sales data last week that allayed fears of a U.S. recession.
Trump denied he is demanding that Fed Chief Jerome Powell cut rates once again.
“I don't demand it, but if he used his head, he would lower them,” Trump said.
Trump said “in Germany, they have a zero interest rate, and we do compete with Germany,” although Trump said the U.S. is “much stronger” than Germany.
“If you look at what's happening around the world, Jay Powell and the Federal Reserve have totally missed the call. I was right. And just about everybody admits that I was right. He did quantitative tightening. He shouldn't have done that. He raised interest rates too fast, too furious and we have a normalized rate.”
Trump said: “We'll see if he does it. If he does it you'll see a rocket ship. You'll see -- if he doesn't, we have a very strong economy but with that, we could be -- we could be in a place that this nation was seldom at if we had interest rates cut by the Federal Reserve.”
Trump's midday comments came just hours after he continued to pressure the Fed and the central bank’s chairman to lower interest rates, saying its policies were hampering U.S. growth and reducing the country’s ability to compete economically, Reuters explained.
“Doing great with China and other Trade Deals. The only problem we have is Jay Powell and the Fed. He’s like a golfer who can’t putt, has no touch. Big U.S. growth if he does the right thing, BIG CUT - but don’t count on him!” Trump wrote earlier on Twitter.
“We are competing with many countries that have a far lower interest rate, and we should be lower than them,” he added.
Minneapolis Federal Reserve Bank President Neel Kashkari, who does not have a vote on the Fed’s monetary policy committee this year but participates in policy discussions at the central bank, urged the Fed to use forward guidance as the global economy has slowed in an op-ed published in the Financial Times on Wednesday.
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