Trump Pressures Fed Chair Powell to Cut Interest Rates Amid Slowing Job Growth

President Trump has reiterated his call for a reduction in interest rates from Jerome Powell, the chairman of the US Federal Reserve, following the release of employment statistics that indicated a slowdown in hiring for May.

In a post shared on Truth Social, the platform he founded, Trump criticized Powell by using his nickname, stating: ‘Too Late at the Fed is a disaster! Europe has implemented 10 rate cuts, yet we have not seen any. Despite him, our country is performing well. Aim for a full point, Rocket Fuel!’

In reaction to the latest payroll data, which revealed that the US economy added 139,000 jobs in May—down from 147,000 in April but surpassing the projected 125,000—traders revised their expectations regarding a potential rate cut in June or July. The rolling three-month average job growth is now at 135,000, compared to an average of 160,000 jobs last year.

Nonetheless, the unemployment rate held steady at 4.2 percent for May, unchanged for three months, according to the Bureau of Labor Statistics’ employment report, indicating that the job market remains robust despite uncertainties stemming from tariffs.

The Federal Reserve opted not to adjust interest rates in May, as officials assessed the effects of Trump’s tariffs on inflation and unemployment. The current benchmark policy rate is maintained in the 4.25 percent to 4.5 percent range.

Earlier this week, Trump had also urged Powell to reduce interest rates following the announcement that private sector jobs increased by only 37,000 in May, marking the slowest growth since March 2023.

According to the Labor Department’s report, healthcare sectors added 62,000 jobs in May, whereas the hospitality sector, comprising bars and restaurants, contributed an additional 30,000 jobs.

However, the federal government experienced a loss of 22,000 jobs—its greatest drop since November 2020—due to cutbacks and a hiring freeze implemented by Trump.

Manufacturing witnessed a loss of 8,000 jobs, while the retail sector saw a decline of 6,500 jobs, suggesting that companies are slowing hiring in response to increased costs resulting from the ongoing trade conflicts. In contrast, transportation and warehousing added 5,800 jobs, despite reports indicating significant decreases in job openings due to diminished import volumes.

Average hourly earnings increased by 0.4 percent from April and are up 3.9 percent year-over-year.

Following the release of the employment report, US stock markets saw a positive reaction. The S&P 500 climbed by 1.1 percent, the Nasdaq Composite surged by 1.3 percent, while the Dow Jones Industrial Average rose by 1.2 percent.

Stephen Brown, deputy chief North America economist at Capital Economics, remarked: ‘Overall, there’s nothing in this report that would prompt a significant shift in the Fed’s stance during this month’s meeting, and we believe the Fed will remain steady throughout the year.’