Trump Hits Fed on Inflation, Vows Energy Boom and Deregulation to Tame Prices

President Donald Trump addresses the 2025 Republican Issues Conference at the Trump National Doral Miami golf club on Jan. 27, 2025. Joe Raedle/Getty Images

President Donald Trump on Wednesday accused Federal Reserve Chair Jerome Powell of failing to control inflation, blaming the Fed’s focus on social and environmental issues.

The president vowed to counter what he called the Fed’s mismanagement with deregulation, energy expansion, and Treasury-led lending that would boost economic growth and ease inflationary pressures.

Trump’s remarks, made in a Truth Social post, came after the Fed decided to hold interest rates steady in response to persistent inflation concerns. Powell, speaking at a press briefing, signaled that rates could remain elevated for an extended period if inflation fails to decline further.

“If the economy remains strong and inflation does not continue to move sustainably toward 2 percent, we can maintain policy restraint for longer,” Powell said. “If the labor market were to weaken unexpectedly or inflation were to fall more quickly than anticipated, we can ease policy accordingly.”

Trump, who has recently ramped up pressure on the Fed to cut interest rates, accused Powell of mismanaging inflation and claimed that the central bank had neglected its core mandate by focusing too much on issues like diversity, equity, and inclusion (DEI), climate policies, and social justice.

“If the Fed had spent less time on DEI, gender ideology, ‘green’ energy, and fake climate change, Inflation would never have been a problem,” Trump wrote. His remarks align with his administration’s early efforts to dismantle Biden-era DEI initiatives and climate policies, echoing his first-term economic agenda.

Trump further blamed Powell and the Fed for failing to prevent inflation and vowed to take matters into his own hands.

“I will do it by unleashing American Energy production, slashing Regulation, rebalancing International Trade, and reigniting American Manufacturing,” Trump wrote. “Treasury is going to lead the effort to cut unnecessary Regulation, and will unleash lending for all American people and businesses.”

A Federal Reserve spokesman declined to comment in response to an inquiry on Trump’s claim that the Fed’s focus on social and environmental issues had undermined its inflation-fighting efforts.

While Trump did not provide specific details on his plans, he has previously touted increased domestic energy production as a key strategy for reducing inflation.

Further, although interest rate policy falls under the Federal Reserve’s jurisdiction, Trump’s pledge to “unleash lending” through the Treasury suggests a focus on loosening financial regulations to make credit more accessible.

One possible approach could involve reducing capital requirements for banks, which would allow them to increase lending. While the Treasury does not directly regulate banks, it oversees the Office of the Comptroller of the Currency (OCC), which supervises national banks. Treasury could pressure the OCC and other regulators to ease restrictions on financial institutions.

Another avenue would be working with the Small Business Administration (SBA) to expand loan guarantees, relax eligibility requirements, and streamline approval processes—making it easier for small businesses to access credit.

Meanwhile, analysts at ING said in a note that they expect the Fed to lower rates eventually, but not before it’s warranted by economic data.

“Robust activity, a solid jobs market and sticky inflation justify the Fed’s decision to hold interest rates steady,” they wrote. “The hawkish tilt from officials may in part be a message to President Trump that they won’t bow to his will on interest rates and suggests a clear and unambiguous weakening in the data is required to prompt further action.”

“With tomorrow’s GDP data expected to show the economy grew 2.8 [percent] last year and with unemployment a little above 4 [percent] and core inflation lingering around 3 [percent] the Fed are likely to pause here for a number of months,” they added, while predicting that the Fed will deliver two 25-basis-point cuts at the end of 2025, followed by a further 25-basis-point reduction in early 2026.