Trump expects a 'big cut' from Federal Reserve this week

The US President Donald Trump predicted a “big cut” from the Federal Reserve this week ahead of a pivotal meeting at which the central bank’s governors are expected to ease policy for the first time in nine months.

“I think you have a big cut,” Trump told reporters on Sunday on his way back to Washington. “It’s perfect for cutting.”

The Fed is widely expected to cut interest rates on September 17 as it grapples with a slowing labour market, stubborn inflation and an unprecedented push by Trump for lower borrowing costs. The median estimate from a Bloomberg survey of economists is for a 25 25-basis-point (bps) reduction.

Also Read | 'Not an easy thing to do': Donald Trump accepts tariffs caused ‘rift with India'

Trump has been putting pressure on Fed Chair Jerome Powell for months to cut rates and repeatedly encouraged him to resign.

Recent weak economic reports are raising concerns that the labour market may slide into a deeper slowdown, threatening consumer spending and growth. At the same time, inflation remains above the Fed’s 2% goal and could rise further if tariffs push up costs, leaving some officials cautious about acting too quickly.

Powell’s term is set to end in May 2026, and Trump is in the process of deciding on his successor. The president has publicly named White House economic adviser Kevin Hassett, Fed Governor Christopher Waller and former Fed Governor Kevin Warsh as three top candidates.