U.S. President Donald Trump on Wednesday repeated his call for lower interest rates, arguing they would go "hand in hand" with his upcoming tariffs, despite economists warning that levies could drive inflation higher and delay any potential rate cuts.
Trump substantially raised tariffs on steel and aluminum imports on Monday to a flat 25% "without exceptions or exemptions," in a move he hopes will aid struggling industries in the United States, but which also risks sparking a trade war.
"Interest Rates should be lowered, something which would go hand in hand with upcoming Tariffs!!!" Trump wrote in a post on his Truth Social platform.
However, Federal Reserve (Fed) Chair Jerome Powell told U.S. lawmakers on Tuesday that the central bank was in no rush to cut its short-term interest rate again, given that the economy was strong overall.
Powell is to testify before the House Financial Services Committee on Wednesday as Trump's trade advisers finalize plans for additional reciprocal tariffs.
Data earlier on Wednesday showed U.S. inflation increased more than expected in January, a disappointment for families and businesses struggling with higher costs.
The consumer price index increased 3% last month from a year ago, a report from the Labor Department showed, up from 2.9% in December. It has risen from a 3 1/2-year low of 2.4% in September.
Trump went on to blame his Democratic predecessor, Joe Biden, for the unexpected uptick.
"BIDEN INFLATION UP!" he wrote in a social media post. On the election campaign trail, Trump made tackling inflation and the cost of living a priority.
Economists have raised their inflation forecasts since Trump was elected, based on concerns his policies, particularly on tariffs, could re-ignite price pressures in the economy.
