Trump presses for lower interest rates even as U.S. inflation edges up to 3% in January

President Trump said Wednesday he thinks interest rates should come down, injecting himself into the debate around Federal Reserve decisions just as the government was reporting that U.S. inflation for January remained well above the Fed’s preferred target.

The Labor Department reported the Consumer Price Index rose 3% compared to January 2024. Prices for key items such as groceries and gas were up, disappointing the markets and making it difficult for the central bank to move in Mr. Trump’s preferred direction.

The inflation rate for January was up slightly from the 2.9% rate reported for the 12 months ending in December.

Mr. Trump, writing on Truth Social, argued that a decrease in borrowing rates from the Fed would pair nicely with his trade agenda.

“Interest rates should be lowered, something which would go hand in hand with upcoming Tariffs!!! Lets [sic] Rock and Roll, America!!!” Mr. Trump wrote.

But U.S. markets struggled with the hotter-than-expected inflation report, which could mean a slowing economy while the Fed keeps interest rates at their current elevated levels for longer than anticipated. The Dow Jones Industrial Average, S&P 500 and Nasdaq all plummeted early Wednesday before regaining territory later in the day’s trading.

Mr. Trump, who was inaugurated on Jan. 20, swiftly cast blame on his predecessor.

“BIDEN INFLATION UP!” he wrote on his social media platform.

White House press secretary Karoline Leavitt said the previous administration “was not transparent about where the economy truly was.”

“This is an indictment on the Biden administration’s mismanagement of the inflation crisis,” she said.

Ms. Leavitt said Mr. Trump wants inflation to go down and thinks his agenda, taken as a whole, will bring down prices.

Senate Minority Leader Charles E. Schumer accused Mr. Trump and his allies of having no plan to follow through on campaign promises.

“Donald Trump said, during his campaign, prices would come down starting on Day One. It’s Day 23, and prices are up 3%,” said Mr. Schumer, New York Democrat. “Donald Trump is already breaking his promise to the American people.”

Mr. Trump pushed for lower interest rates one day after Federal Reserve Chair Jerome Powell told Congress the central bank was in no hurry to slash rates as it monitors stubborn inflation. Mr. Powell declined to comment on the new administration’s economic program, but economists warn that the president’s wide-ranging tariffs could increase some prices, forcing the Fed to postpone rate cuts.

Mr. Trump imposed a 25% tariff on steel and aluminum imports and plans to slap reciprocal tariffs on countries that tax U.S. exports.

“It’s the golden rule which we all learned when we were growing up in school — treat others as you would want to be treated,” White House press secretary Karoline Leavitt said Wednesday.

While Mr. Trump has the executive power to impose tariffs in some instances, interest rates are under the purview of the Fed. That hasn’t stopped the president from weighing in from time to time.

Some Democrats are worried Mr. Trump will put too much pressure on the central bank or try to make changes.

“Just this weekend, the president removed the board of the Kennedy Center and made himself chairman,” Sen. Jack Reed, Rhode Island Democrat, said during Mr. Powell’s semi-annual report to Congress on Tuesday. “What would you do if the president tried to remove a member of the Federal Reserve board?”

Mr. Powell said that is “pretty clearly not allowed under the law.”