If the Federal Reserve leaves interest rates unchanged as expected on Wednesday, it will be an outlier among major central banks.
Policymakers at the European Central Bank, the Bank of Canada and other central banks have all announced rate cuts in recent months, largely in response to the effects of President Trump’s trade war, which is expected to slow global growth.
Fed officials are also worried about trade and how tariffs and other policies might affect the economy, but they have adopted a wait-and-see approach in order to better understand the impact of his policies. Fed officials cut rates three times last year, by a total of one percentage point, but have been on pause since.
The European Central Bank, by contrast, has cut rates eight times over the past 12 months, by a total of two percentage points. The Bank of Canada has cut rates seven times, by a total of two and a quarter points, over a similar period.
The fact that other global central banks are cutting more regularly than the Fed has galvanized Mr. Trump and underscored the tricky decision facing Jerome H. Powell, the Fed chair. Mr. Trump has increasingly pointed to the Fed’s peers as he tries to jawbone Mr. Powell into cutting rates, referring to him as “Too Late.”
“I call him ‘Too Late Powell’ because he’s always too late,” Mr. Trump said at the White House on Wednesday, just hours before the Fed announces its latest decision on rates.
“He probably won’t cut today,” Mr. Trump said, adding that the Fed should cut rates by 2.5 percentage points, which would be one of the biggest moves in the central bank’s history.
“I don’t expect anything, maybe he does a little bit,” he said, noting that central banks in Europe had cut more often.
Mr. Trump has long beaten up on the Fed and Mr. Powell for not cutting rates quickly enough for his liking. Last month, for example, Mr. Trump cited rate cuts in Europe and China and posted on social media: “What is wrong with Too Late Powell? Not fair to America, which is ready to blossom? Just let it all happen, it will be a beautiful thing!”
But the Fed is grappling with a different set of economic factors than other large economies as it tries to keep inflation stable despite steep U.S. tariffs and maintain a solid labor market. Inflation remains above the Fed’s 2 percent target and officials have expressed concern that Mr. Trump’s tariffs could reignite price gains. At the same time, the labor market is showing some signs of softening, putting its goals in tension.
That balancing act seems to matter little to Mr. Trump, who on Wednesday floated another idea: “Am I allowed to appoint myself to the Fed?” he asked, somewhat facetiously, before repeating that rates should be slashed.
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