Vice President Vance Urges Fed to Cut Rates After Latest Inflation Readings

U.S. Vice President J.D. Vance on Thursday renewed public pressure on the Federal Reserve to lower interest rates, framing a cut as an appropriate response to recent inflation data even as Fed officials signal a more cautious stance. Speaking at a White House press briefing on Sept. 3, Vance said, \"We believe the Federal Reserve should cut interest rates,\" calling it a \"correct and responsible\" move in light of recent inflation figures. He added that the administration is working to push borrowing costs down but would welcome assistance from the central bank: \"We are doing a lot to bring down rates, but it would be better if we could get some help from the Federal Reserve.\" Vance tied the administration's push for lower rates directly to housing affordability, saying the president is focused on helping Americans buy homes and that higher rates raise borrowing costs. CNBC reported the comments were made in response to a question about how the Trump administration views swings in the U.S. bond market. The remarks come less than two weeks ahead of the Federal Open Market Committee meeting scheduled for Sept. 15–16. Market expectations remain split. CME Group's FedWatch shows traders are currently pricing nearly even odds on whether the meeting results in a rate hike, underscoring heightened uncertainty. Vance's call diverges from recent messages from inside the Fed. Less than a week ago at the Jackson Hole symposium in Wyoming, Chair Jerome Powell — nominated by Trump — reiterated his commitment to returning inflation to the 2% target and described short-term interest rates as the \"primary tool\" for meeting the Fed's dual mandate, language investors took as potentially pointing toward further tightening. Fed officials remain divided. On Tuesday, Governor Michael Barr said he is prepared to support additional rate increases if inflation stays elevated. Earlier Thursday, Governor Christopher Waller signaled a preference to keep rates unchanged. This is not Vance's first public intervention. In June, after the Bureau of Labor Statistics released May CPI data, Vance and Trump posted on X urging the Fed to cut rates. May headline CPI rose 0.1% month over month, with core CPI also up 0.1%; the year-over-year rates were 2.4% and 2.8%, respectively, still above the Fed's 2% goal. At the time, Vance said, \"The president has said this all along, but it's now clearer than ever: the Fed's refusal to cut rates is a failure of monetary policy.\" During the same period, Trump wrote on Truth Social that the Fed should cut rates by a full percentage point, arguing it would materially reduce interest costs as U.S. debt matures. CNBC said Vance's latest comments could amplify concerns about political pressure undermining the Fed's independence. Trump previously pressed Powell's predecessor to sharply cut rates and is now seeking to remove Fed Governor Lisa Cook. The Fed last lowered interest rates in December 2024. Since then, policymakers have held steady, repeatedly warning that tariff policies could lift prices in the future.