After the Federal Reserve (the American central bank) announced on Wednesday, December 10, 2025, a reduction in the key interest rates by 25 basis points (a quarter percentage point), Trump criticized the decision and described it as too limited. His main comment was:
· The reduction was "small": Trump said that the interest cut was "limited" and could have been larger.
· Demand for at least double the cut: it was emphasized that the cut was "too small a number," and should have been "at least doubled."
· Criticism of the Federal: the central bank was accused of killing economic growth due to its excessive fear of inflation, believing that strong growth can be achieved without significant inflation.
💡 Details of the Federal's decision
Trump's stance is set against the backdrop of a Federal decision made amid complex economic conditions:
· Details of the cut: the Federal cut interest rates for the third consecutive time in 2025, bringing the target rate to a range of 3.50% to 3.75%. This is the lowest rate level since late 2022.
· Reasons for the cut: the main driver was increasing concerns about a slowdown in the labor market and employment data that may be weaker than it appears, although inflation remains above the target of 2%.
· Sharp internal division: the decision showed a clear division within the policy committee:
· 3 members opposed the decision.
· 2 of them wanted to keep the rates unchanged.
· One member, who is an appointee of Trump, wanted a larger cut of half a percentage point.
🔮 Future forecasts and the Federal's stance
The Federal does not seem to intend to respond to pressures for further interest rate cuts in the near term:
· Temporary pause: Federal Chairman Jerome Powell stated that the central bank "is in a good position to wait and see how the economy develops," indicating a possible pause in the rate-cutting cycle after this decision.
· Limited forecasts for next year: the Federal's official economic forecasts indicate only one potential rate cut during 2026, which is less than what Trump or some markets expect.
· Ongoing dispute with the White House: this cautious stance puts the Federal in conflict with the political desire to lower rates more quickly.
