Vance teams up with Trump to criticize Powell, claiming the Fed is engaging in ‘monetary malpractice’ for not lowering interest rates.

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U.S. Vice President JD Vance speaks, during a tour of Nucor Steel Berkeley in Huger, South Carolina, U.S., May 1, 2025. Kevin Lamarque | Reuters

President Donald Trump and Vice President JD Vance are now collaborating to address the Federal Reserve in an effort to secure lower interest rates. 

In a social media post Wednesday morning on X, Vance resonated with the president's calls for the central bank to ease monetary policy, after recent inflation readings indicated that tariffs have not significantly increased inflation pressures. "The president has been saying this for a while, but it's even more clear: the refusal by the Fed to cut rates is monetary malpractice," Vance stated.

This statement followed a Bureau of Labor Statistics report showing that the consumer price index increased just 0.1% for both the all-items reading and the core index excluding food and energy. On an annual basis, inflation levels were recorded at 2.4% and 2.8%, both exceeding the Fed's 2% target.

While Trump had not yet commented on the CPI numbers himself Wednesday, he has been persistently urging Chair Jerome Powell and other members of the Federal Open Market Committee to reduce rates. The Fed last eased rates in December, and officials have recently voiced concerns regarding the longer-term effects that tariffs may have on prices. Trump has advocated for a full percentage point reduction from the current target level for the fed funds rate, which stands at 4.25%-4.5%.

The FOMC will announce its interest rate decision in a week, with markets currently assigning zero probability to a rate cut following the two-day meeting. Traders are anticipating a Fed easing in September, according to CME Group data.

Administration officials have highlighted the easing inflation data along with a moderating labor market as justifications for lowering rates. "To me, that combination says it may be time for another rate cut, but I expect the Fed to emphasize the ongoing uncertainty and a desire to not act too early. It’s a tough spot," said Elyse Ausenbaugh, head of investment strategy at J.P. Morgan Wealth Management.

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