President Trump has urged Federal Reserve to cut interest rates, writing on social media last month that central banks are “too late and wrong” to refrain from further cuts. The Fed is currently scheduled to meet Wednesday to make a decision on the next fee, but Trump may need to wait longer to get his cut.
The Federal Reserve is expected to stabilize its benchmark rate at its May 7th meeting, according to CME Group’s FedWatch. The group pegs at a 97% chance that the Fed will maintain its current federal funding rate of 4.25% to 4.5%.
The Fed’s meeting occurs when the US economy is sending mixed signals, with GDP unexpectedly Falling into negative territory Employment growth in the first quarter Top predictions April. At the same time, Wall Street economists are hiking them Risk of a recession Because of the US economy due to the impact of Trump’s tariffs that reached imports from China with 145% import duties, it is primarily at the cost handed over to American consumers, Higher price.
The Fed has shown that it will take a waiting approach, and Powell has Last month’s speech That central banks can maintain patients while tariffs and other Trump administration economic policies are underway.
“The Fed and investors find themselves in lands where no one is waiting to see if economic policies will raise prices and reduce growth,” said Scott Helfstein, Global X’s Head of Investment Strategy, in an email.
He said, “The reality is that corporate revenue is pretty strong, the US economy is bounced back, and emotions are the biggest source of concern. There is no good reason to change the fees at this point.
Here’s what you need to know about the next Fed meeting:
What day will the Fed meet next?
The Federal Open Market Committee, a group of 12 people setting rate decisions, will meet May 6-7, with the Fed announce the FOMC decision on May 7.
What time will the Fed rate be announced?
The Fed announced its rate decision at 2pm on May 7th, and Federal Reserve Chairman Jerome Powell will discuss the committee’s decision at a press conference at 2:30pm that day.
What are the possibilities for reducing the Fed rate?
Very slim, the economists predict the odds of 97% that the Fed will maintain a benchmark rate of 4.25% to 4.5%.
“Criticism from President Trump will not trigger a Fed’s policy response. Whether early cuts without evidence of labour market degradation or stubborn rejection as labor markets softens, long-term inflation expectations remain fixed, according to a research note on May 6.
When do you expect the Fed to cut fees?
Economists say consumers who are keen to ease borrowing costs are likely to face a wait.
According to CME Fedwatch, the Fed held a meeting on June 18th after the May 7 meeting, and now the central bank is hoping to hold it steadily. That poll shows that there is a 70% chance that the Fed will maintain its benchmark rate between 4.25% and 4.5% at its meeting.
However, FedWatch said it is likely that the Fed will be able to cut rates at its July 30 meeting, as it is likely that the Fed is currently sitting at 80%.
However, some economists hope that the central bank will hold it down for longer.
“We believe the Federal Reserve will actively cut interest rates next year as tariff-induced inflation begins to fade and the labor market is showing more troubling signs,” said Ryan Sweet, Chief US Economist at Oxford Economics.
Why is Trump wanting to cut rates now?
Trump argues that inflation is steadily cooling and that high borrowing costs are no longer necessary to keep prices up. The Fed has spiked short-term rates sharply as pandemic-era inflation surged in 2022 and 2023.
On Friday, Trump said he was the truth about his social media platform, “There’s no inflation,” claiming that groceries and egg prices fell, and gas fell to $1.98.
But those claims are It’s not completely true: Grocery prices have increased by 0.5% over the past three months, up 2.4% over a year ago. Gas and oil prices have fallen – gas costs have fallen by 10% from a year ago – continuing a long-term trend that has been partially continuing due to fears of weakening the economy. Still, according to the AAA, gas prices nationwide are $3.18 per gallon.
What does the Fed decision mean for your money?
Borrowers looking for relief with loan and credit card fees are waiting more than they do, experts say.
“There is a huge amount of uncertainty in the economy right now,” said Matt Schulz, chief consumer finance analyst at LendingTree, in an email. “No one knows what the next few months will look like, but what’s obvious is that Americans are at least waiting a little longer for the Fed to cut fees.”
Schulz predicts credit card fees could be as high as car loan fees in the coming months.
“Banks are nervous about all the uncertainties in the economy and what it means to consumers,” he noted. “When that happens, banks try to minimize risk as much as possible. One way they do it is to raise interest rates on their credit cards.”
So consumers need to focus on shopping at the best prices they can find. Schulz added that it would also need to consider transferring existing high-profit credit card liabilities to a 0% balance transfer card.
