Trump Intensifies Pressure on the Federal Reserve as Inflation Cools

 U.S. President Donald Trump has renewed his call for the Federal Reserve to cut interest rates, citing recent economic indicators that point to a notable slowdown in inflation. In a post on the Truth Social platform, Trump claimed that gasoline, energy, groceries, and nearly all other consumer prices have declined, asserting that “there is no inflation” and urging the Fed to lower interest rates, as central banks in Europe and China have done.

Trump’s remarks come after official data released by the U.S. Department of Labor showed a continued deceleration in inflation for the third consecutive month. Consumer prices rose by 2.3% year-on-year in April 2025, down slightly from 2.4% in March, marking the lowest annual increase in over four years. On a monthly basis, the Consumer Price Index (CPI) rose by 0.2% in April, following a 0.1% decline in March — the first monthly drop since May 2020.

Despite Trump’s assertions, many economists and analysts maintain a cautious outlook, noting that recent tariffs imposed by the Trump administration could contribute to upward price pressures in the months ahead. However, several sub-indices indicate real price declines, including a 0.4% drop in grocery prices, driven in part by a significant 12.7% decline in egg prices — the steepest drop in home food costs since September 2020.

Meanwhile, core inflation — which excludes volatile food and energy prices — remained steady at 2.8% year-on-year in April, matching March’s figure. This stability may provide the Federal Reserve with some room for flexibility before making any major shifts in monetary policy.

The recent easing in U.S. inflation presents a positive signal for both markets and consumers. However, calls for interest rate cuts are still met with caution by the Federal Reserve, which remains focused on balancing economic growth with inflation control. Given the mixed signals and potential policy shifts, investors and financial institutions are advised to monitor economic data closely and prepare for potential volatility in the near term.