Trump pressures Powell again, calling for an immediate one percentage point rate cut.

On Friday, US President Trump once again spoke out on the social platform Truth Social, urging Federal Reserve Chairman Powell to cut interest rates by a full percentage point. "Cut it directly by one percentage point, give the economy 'rocket fuel'!" Trump wrote in the post. He also stated that the US economy is "performing very well," but still believes that lower rates will further boost growth. However, the financial markets are not buying into this. According to pricing data ahead of the Federal Open Market Committee (FOMC) meeting, investors have almost completely ruled out the possibility of a rate cut at this month's meeting, let alone a bold move of cutting rates by 100 basis points. The timing of this statement is quite delicate. Data released by the US Bureau of Labor Statistics on the same day showed that 139,000 nonfarm jobs were added in May, higher than the market's previous expectations of 125,000, although slightly lower than the revised downward figure of 147,000 in April. Analysts had previously expected weaker job numbers due to Trump's tariffs and signs of economic slowdown. Nevertheless, Trump continued to criticize Powell for "acting too slow" and accused him of causing "tremendous losses to the country." "The cost of borrowing should be significantly reduced! Powell made us spend too much money!" Trump wrote. He once again used his previous accusatory language, calling Powell a "disaster" and claiming that the US economy is doing well "despite him" and not because of him. Trump's complaints also extended to a global central bank policy comparison. He pointed out that central banks in other countries are continuing to cut rates, while the Federal Reserve remains on hold. In fact, the European Central Bank cut its benchmark rate by 25 basis points earlier this week, marking its eighth rate cut since June last year, although it indicated that it may not continue cutting rates this year. The reason for the ECB's rate cut this time was the slowdown in inflation and economic growth. In contrast, the Federal Reserve is more concerned about inflation picking up again, especially against the backdrop of Trump's tariffs potentially pushing prices higher. Some officials believe that prematurely easing monetary policy may backfire when inflation is not fully under control. Trump, however, believes that even if inflation rises again, Powell can raise rates again. "It's very simple!" he said. He also emphasized that by cutting rates, the US can lower the long-term and short-term financing costs of "soon-to-be-due Treasury bonds." Expectations for a rate cut in September have significantly cooled. Before the employment report was released, traders expected a 62% probability of a rate cut by the Federal Reserve in September; but this probability has dropped significantly due to the higher-than-expected wage growth. Data shows that average hourly earnings in the US rose by 3.9% year-on-year in May, exceeding expectations by 0.2 percentage points. According to the CME Group's FedWatch tool, investors currently only believe there is a 22% probability that the Federal Reserve will cut rates two or more times by the end of 2025.