A weak jobs report released Friday likely sealed an interest rate cut at the Federal Reserve’s next policy meeting later this month, as the Trump administration once again stepped up its criticisms of central bank chair Jerome Powell for not acting sooner.
“Jerome Powell needs to do his job and cut those interest rates now,” Labor Secretary Lori Chavez-DeRemer said in an interview with Yahoo Finance.
“What is he waiting for?”
President Trump added in a separate Truth Social post that “Jerome ‘Too Late’ Powell should have lowered rates long ago.”
Friday’s report was the last major reading on the job market before the Fed meets on Sept. 16 and 17.
Ahead of Friday’s jobs report, Powell opened the door to lowering rates at the end of August in a speech in Jackson Hole, Wyo., noting that the balance of risks appears to be shifting and that “may warrant adjusting our policy stance.”
A new labor report on Friday backed up that view. The economy added 22,000 jobs in August, weaker than the 75,000 economists expected, with the unemployment rate rising to 4.3% from 4.2%.
Job growth for June was revised into negative territory to -13,000 jobs, while July showed below-trend growth compared with the past year, marking three months of slowing job growth.
Several Fed watchers said the numbers lock in a cut this month. Investors agreed, sending the odds of a cut at this month’s meeting to 99%.
“The question of a cut is no question. There is going to be a cut,” Leslie Falconio, UBS Global Wealth Management’s head of taxable fixed income strategy, told Yahoo Finance.
The question, she said, is whether it’s a “dovish cut or a hawkish cut” and how Powell talks about the next several months.
Read more: How jobs, inflation, and the Fed are all related
EY chief economist Greg Daco said he is sticking with his view of a small cut this month, but the real question is “what it does after that” for the remaining two meetings of 2025 and then 2026.
The White House has been hammering Powell and the Fed for months now to ease monetary policy.
“While I’m not the economist, I can tell you this: If he doesn’t cut rates, the American people will continue to suffer,” Chavez-DeRemer added Friday.
“Companies are investing trillions of dollars into the economy, into their workforce, and into their businesses … and we need that help because cheaper dollars for American business to invest in their workforce is not happening.”
Speaking about Powell, she said: “Why he’s waiting boggles my mind. He knows the data, he knows how important this is, and if it’s a political move, it’s nonsense. He needs to go ahead and move forward and cut those rates.”
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