Trump criticized Powell for not cutting rates to save $600 billion in debt costs.

From Investing.com: 2025-06-24 16:12:00

Last week, the Federal Reserve decided to keep the federal funds rate unchanged at 4.25–4.5%, citing uncertainty over inflation and tariffs. Trump criticized Powell for not cutting rates, claiming a 2% reduction could save $600 billion in debt servicing costs. However, Powell defended the Fed’s independence and dual mandate. Nearly $6 trillion in T-bills will need refinancing at or near the fed funds rate this year, potentially saving $125-150 billion with a 2% rate cut. However, significant reduction in U.S. interest expenses may require zero interest rate policies. The Fed may cut rates this year, but substantial reduction is unlikely without economic contraction.

Source: LPL Research, Bloomberg 06/24/25



Read more at Investing.com: Rate Cuts and Reality: Why Trump’s $600B Debt Savings Claim Falls Short