Former U.S. President Donald Trump sharply criticized Federal Reserve Chair Jerome Powell on Wednesday following the release of disappointing employment data, urging immediate action to lower interest rates. His comments, shared on Truth Social, reignited concerns over political interference in monetary policy.
“ADP number out. ‘Too Late’ Powell must now lower the rate. He is unbelievable. Europe has lowered nine times,” Trump wrote in response to fresh labor market data showing significant weakness.
The ADP National Employment Report revealed that U.S. private-sector job growth fell sharply in May, with only 37,000 positions added — well below expectations and the revised April total of 60,000. Economists surveyed by Reuters had projected an increase of 110,000 jobs for the month, highlighting the magnitude of the shortfall.
Market Focus Shifts to Key Labor Department Report
The ADP figures precede Friday’s official jobs report from the Bureau of Labor Statistics, a more comprehensive indicator of U.S. employment health. Analysts see the upcoming data as critical to shaping expectations about the Federal Reserve’s next moves on interest rates.
Treasury yields fell in reaction to the weaker-than-expected ADP numbers, signaling that markets are increasingly betting on a Fed rate cut in the coming months to address economic softening.
Mounting Political Pressure on the Fed
Trump, the frontrunner for the Republican nomination in the upcoming presidential election, has repeatedly lashed out at Powell — often in personal terms — for what he describes as overly cautious monetary policy. His latest comments underscore his broader critique of the central bank’s pace in responding to signs of economic stress.
While Trump’s rhetoric has raised alarms about the independence of the U.S. central bank, he stated last month that he would not remove Powell before his term expires in May 2026.
Nonetheless, Trump’s persistent public pressure has contributed to market volatility, as investors weigh the potential for political influence over Fed decision-making.
Fed Holds Steady Amid Inflation and Fiscal Concerns
Despite mounting calls for rate cuts, the Federal Reserve has refrained from adjusting rates so far in 2025 after several reductions in 2024. Policymakers have cited the need to monitor the inflationary impact of Trump’s renewed tariff policies and ongoing fiscal expansion, including discussions over fresh tax cuts in Washington.
While lower rates could stimulate the slowing U.S. economy, officials are balancing that goal against the risk of reigniting inflation. Long-term Treasury yields have been trending upward, reflecting investor unease over rising federal debt levels and a potentially widening budget deficit.
