Jennifer Sor
2 min read
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JD Vance is joining Trump in putting pressure on the Fed to cut interest rates.
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The vice president said that the Fed's refusal to cut rates was "monetary malpractice."
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The central bank has said it's monitoring the impact of tariffs on inflation.
JD Vance is taking a page out of the president's playbook.
The Vice President took a shot at the Federal Reserve on Wednesday, suggesting that the Fed should cut interest rates in a post on X.
The comments came shortly after markets took in the latest inflation data. Core inflation—a measure of price growth that excludes volatile food and energy prices—rose 0.1% in May, while annual headline inflation was 2.4%. The readings were cooler than economists were expecting.
"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 wrote in a post on X on Wednesday.
Vance was echoing the sentiment frequently voiced by President Donald Trump, who has hounded the central bank all year to slash interest rates.
Trump, who has promised to lower borrowing costs for Americans, kicked off his second term by saying he would demand interest rates "drop immediately" when speaking at the World Economic Forum in January.
He's gone on the bash Fed Chair Jerome Powell multiple times this year, calling the central bank chief a "fool," a "major loser," and "Too Late" in a slew of posts on Truth Social. He also suggested he could fire the Fed Chair, before walking back those comments in April after backlash from markets.
The Fed, though, has signaled that it's comfortable keeping interest rates unchanged as it assesses the impact of tariffs on inflation. Tariffs could raise prices for consumers, and elevated interest rates can help keep a lid on price increases. While that's yet to be seen in the official inflation data, some expect the impact to show up in prices later this year.
In prepared remarks after the Fed's May policy meeting, Powell said the central bank believed the risk of higher inflation had risen, in part due to Trump's tariffs.
"If the large increases in tariffs that have been announced are sustained, they are likely to generate a rise in inflation, a slowdown in economic growth, and an increase in unemployment," Powell said at a press conference, adding that the inflationary impact of tariffs could either be short-lived or "more persistent."
Read the original article on Business Insider
