(Yahoo!Finance) - President Trump renewed his call for Federal Reserve Chair Jerome Powell to lower interest rates as a new report showed weakness in the job market.
"'Too Late' Powell must now LOWER THE RATE," Trump posted Wednesday on Truth Social. "He is unbelievable!!!"
Trump in his post referenced the new ADP National Employment Report out Wednesday showing private-sector hiring growth fell sharply last month.
Just 37,000 jobs were created in May, according to the report, the smallest increase in private payrolls since March 2023. That's far fewer than the 114,000 expected by economists and below the 60,000 new jobs added in April.
The new ADP weakness comes ahead of the Labor Department's jobs report due out Friday. Economists estimate that report will show that 130,000 jobs were created last month — down from 177,000 in April — with the unemployment rate holding steady at 4.2%.
Powell this year has repeatedly urged caution and patience on rates, saying he expects Trump's tariffs to push inflation higher and drag down growth, putting the Fed in a challenging spot.
Last month, the central bank elected to keep its benchmark interest rate unchanged at a range of 4.25% to 4.5%. Its next policy meeting is June 17-18, and investors don't expect any change at that gathering.
Powell met with Trump in person last Thursday. The White House said the president told the central bank boss that he is making a mistake by not lowering rates.
The face-to-face encounter follows months of criticism of Powell from Trump, who has called Powell a "major loser" and a "fool" who "doesn't have a clue."
A divide is emerging among Powell's fellow policymakers about whether to hold rates steady for some time or get more comfortable about cuts later this year as officials try to determine whether any inflation coming from President Trump's tariffs will prove to be longer-lasting.
Some policymakers are arguing for "looking through" the impact of the duties as temporary, a stance that would leave the door open for cuts. Many on the rate-setting committee, however, believe there is a risk that inflation from tariffs could become more persistent.
The patient approach by the US central bank contrasts with foreign central banks like the European Central Bank, which has cut rates seven times in a little more than a year and is set to cut rates again on Thursday. Investors expect Thursday's cut to be among the last in this string unless the eurozone economy faces recession.
"Europe has lowered nine times," Trump posted Wednesday.
While tariffs are thought to have an inflationary impact in the US, in Europe they are expected to be more deflationary.
Swiss consumer prices were in deflationary territory in May, raising the prospect that the Swiss National Bank will cut interest rates further later this month.
By Jennifer Schonberger · Senior Reporter
