President Trump presses Fed for rapid rate cuts after strong 4.3% GDP jump
Trump urges faster Fed rate cuts after 4.3% GDP growth, with Kevin Hassett citing AI-driven productivity gains as proof inflation risks remain contained.
- Trump demands lower interest rates despite 4.3% Q3 2025 GDP beating the 3.3% forecast, arguing strong growth should be rewarded, not restrained.
- NEC veteran Kevin Hassett backs cuts, pointing to AI-led productivity and tariffs-driven trade gains as signs inflation is manageable.
- With Powell’s term ending in May 2026, markets watch Trump’s likely Fed pick and its implications for future U.S. monetary policy.
President Donald Trump has called for interest rate cuts following stronger-than-expected U.S. economic growth, arguing that robust economic performance warrants more accommodative monetary policy, according to public statements.
Trump press for rate cut
The call follows third-quarter 2025 GDP growth of 4.3%, surpassing the anticipated 3.3%. Trump criticized the Federal Reserve’s approach, stating that a strong economy should result in lower interest rates to foster additional growth.
Trump’s position contrasts with the Federal Reserve’s current focus on controlling inflation. The president has stated that strong markets should be rewarded with lower interest rates, and that raising rates during periods of growth undermines economic potential.
Kevin Hassett, former director of the National Economic Council, has expressed support for lower interest rates. In an interview with CNBC, Hassett stated that the Federal Reserve has not adjusted quickly enough to accommodate economic growth. He cited productivity gains in sectors influenced by artificial intelligence as evidence that inflation pressures remain controlled.
Hassett also referenced trade policies, including tariffs, as contributing factors to reduced trade deficits and overall economic growth. He stated that these factors support the case for the Federal Reserve to lower rates to sustain economic expansion.
The interest rate debate occurs as the Federal Reserve prepares for leadership changes. Jerome Powell’s term as Fed Chair expires in May 2026, with Trump expected to announce a replacement. Hassett has been mentioned as a potential contender, given his alignment with Trump’s position on rates.
Hassett has emphasized the importance of Federal Reserve independence and a consensus-based approach, stating that the Federal Open Market Committee should base decisions on data rather than speculative inflation concerns.
The direction of U.S. monetary policy will likely depend on the stance of incoming leadership. Market participants are monitoring developments regarding interest rate policy and Federal Reserve leadership appointments.
