President Donald Trump welcomed the Federal Reserve’s decision this week to cut interest rates by 25 basis points — but in his view, it was only a first step, not the finish line.
Speaking to reporters on Thursday, White House press secretary Karoline Leavitt confirmed that while the president was pleased with the move, he believes borrowing costs should come down further and faster. The message, delivered calmly from the White House podium, carried an unmistakable edge: Trump is not done pushing the central bank.
“I know there was a quarter-point reduction this past week, and the president was pleased to see that,” Leavitt said. “But he thinks more should be done.”
The Federal Reserve announced the rate cut on Wednesday, marking a notable shift after months of holding steady. But the central bank also sent a clear signal of caution, indicating that further reductions are unlikely in the near term as policymakers wait for more clarity on inflation, the labor market, and the broader economy.
That restraint is precisely what continues to frustrate Trump.
A Familiar Clash With the Fed
Trump’s tension with the Federal Reserve — and particularly with Chair Jerome Powell — is nothing new. Throughout his political career, Trump has repeatedly argued that interest rates were kept too high for too long, blaming the Fed for slowing economic momentum and putting unnecessary pressure on businesses and consumers.
This week’s comments reinforce that stance. While the rate cut gave the White House something to point to as progress, it did not change Trump’s core belief: the Fed should be acting more aggressively to lower borrowing costs.
Asked whether the president expects his eventual nominee for Fed chair to pursue further rate cuts, Leavitt did not mince words.
“I think the president has been quite clear about what he believes the Fed should be doing, which is lowering interest rates,” she said.
The Fed’s Cautious Signal
The Federal Reserve, for its part, is signaling patience rather than urgency. Policymakers emphasized that future decisions will depend heavily on incoming economic data — particularly inflation trends and employment figures — before committing to another round of cuts.
That stance reflects the Fed’s long-standing emphasis on independence and data-driven policy. Officials are wary of moving too quickly, especially after years of elevated inflation concerns that forced rates to remain high longer than many in Washington wanted.
Still, Trump’s public pressure places the Fed in a familiar spotlight, raising questions about how political expectations may intersect with monetary policy in the months ahead.
Powell’s Clock Is Ticking
Adding another layer of intrigue is the approaching end of Jerome Powell’s term as Fed chair, which expires in May. Trump has made no secret of his dissatisfaction with Powell’s leadership and has openly criticized him for failing to cut rates earlier and more aggressively.
Leavitt declined to say whether Trump could announce Powell’s successor before Christmas or to provide details about his ongoing conversations with potential candidates. Trump himself said last week that he expects to make a decision early next year.
What is clear is that the search is already well underway.
A Growing List of Contenders
Trump confirmed on Wednesday that he planned to meet with former Federal Reserve Governor Kevin Warsh later that day. Warsh, a long-time critic of certain Fed policies, is seen by many as aligned with Trump’s preference for lower rates and a more growth-focused approach.
The president has also publicly identified Kevin Hassett, his current director of the National Economic Council, as a potential candidate. Hassett works closely with Trump and is widely viewed as a front-runner to succeed Powell.
Treasury Secretary Scott Bessent, who is leading the search effort, previously said the short list also includes Federal Reserve Governor Christopher Waller and Fed Vice Chair of Supervision Michelle Bowman — both of whom were appointed during Trump’s first term. BlackRock executive Rick Rieder has also been mentioned as a possible contender.
The diversity of the list suggests Trump is weighing both institutional experience and ideological alignment as he considers who should lead the nation’s most powerful financial institution.
Markets, Politics, and the Road Ahead
For investors and consumers alike, the situation presents a mix of clarity and uncertainty. The Fed has delivered one rate cut, but its message signals patience rather than momentum. Trump, meanwhile, is openly calling for more action and preparing to reshape the Fed’s leadership in the near future.
That combination ensures interest rates will remain not just an economic issue, but a political one.
As the economy moves into the next phase of the cycle — balancing inflation risks against growth pressures — the battle lines between the White House and the Federal Reserve are becoming clearer once again.
One quarter-point cut may have eased tensions temporarily. But with Trump watching closely and a leadership change on the horizon, the debate over how low rates should go — and how fast — is far from over.
