Vance publicly urges the Federal Reserve again: Interest rates should be cut

US Vice President Vance has once again openly pressured the Federal Reserve, demanding lower interest rates—at a time when the Fed Chair personally nominated by Trump is turning “hawkish.”

On Thursday, September 3, at a White House press conference, Vance stated, “We believe the Federal Reserve should cut interest rates,” calling it the “right and responsible” response to recent inflation data. He added, “We’re doing a lot to bring down rates, but if we could get a little help from the Fed, that would be even better.”

Vance directly linked the demand for a rate cut to housing affordability. He said, “The President cares a lot about interest rates, in part because he wants Americans to be able to afford homes. The higher the rates, the higher the cost of borrowing.”

According to CNBC, Vance made the above remarks when asked about the Trump administration’s views on fluctuations in the US bond market.

These comments were made less than two weeks before the Federal Open Market Committee (FOMC) is set to hold its rate decision meeting from September 15 to 16. According to CME Group FedWatch data, traders are currently almost evenly split on whether this meeting will see a rate hike, with market direction highly uncertain.

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Direct Clash with Waller’s Stance

Vance’s comments are in obvious tension with the latest signals from within the Federal Reserve.

Less than a week ago, Federal Reserve Chair Waller—personally nominated by Trump—gave a speech in Jackson Hole, Wyoming, making it clear he is committed to bringing the inflation rate back to the 2% target and characterizing short-term rates as the “main tool” for achieving the dual mandate—a message the market interpreted as hinting at potential rate hikes.

There are also divisions inside the Fed. On Tuesday, Governor Michael Barr said he is prepared to support a rate hike if inflation remains high; but on Thursday morning, Governor Waller said he is more inclined to keep rates unchanged.

Not the First Time: Pressuring the Fed Back in June

This is not the first time Vance has openly pressured the Federal Reserve.

In June of this year, after the US Bureau of Labor Statistics released the May CPI data, Vance joined Trump on platform X in a coordinated call for the Fed to cut rates. At the time, May’s CPI rose just 0.1% month-on-month, with core CPI also up only 0.1%—an annual rate of 2.4% and 2.8%, respectively—still higher than the Fed’s 2% target.

Vance was even more forceful then, stating bluntly: “The President’s said it for a long time, but now it’s clearer: The Fed’s refusal to cut interest rates is a monetary policy dereliction.”

During the same period, Trump also posted on “Truth Social,” urging the Fed to cut interest rates by a full percentage point and emphasized, “It is extremely important,” arguing that cutting rates would save a large amount of interest payments on the US’s soon-to-mature debt.

Ongoing Debate Over Independence Intensifies

According to CNBC, Vance’s latest statements may further intensify concerns over the erosion of the Federal Reserve’s independence.

Trump previously exerted sustained pressure on Waller’s predecessor Powell to make deep rate cuts, and he is currently seeking to remove Fed governor Lisa Cook.

The last Fed rate cut was in December 2024. Since then, officials have repeatedly expressed concerns that tariff policies could push up future prices, and have held steady until now.