TLDR
- Trump posted on Truth Social demanding Fed Chair Powell cut rates “immediately” rather than wait for next week’s FOMC meeting.
- Markets have priced out most rate cut expectations since the U.S.-Iran conflict began on February 28, now expecting just one cut in 2025.
- Goldman Sachs pushed its first rate cut forecast back to September, with PCE inflation now expected to hit 2.9% by December.
- Iran’s Supreme Leader vowed to keep the Strait of Hormuz closed, sending crude oil to $95.70 per barrel.
- The last intermeeting Fed rate cut was in March 2020 during the COVID-19 crisis.
President Trump is pressing the Federal Reserve to cut interest rates ahead of next week’s Federal Open Market Committee meeting. The pressure comes as the U.S.-Iran war continues to push oil prices higher, increasing inflation risks and making investors less likely to expect rate relief anytime soon.
BREAKING: President Trump calls on Fed Chair Powell to cut interest rates today, before the next Fed meeting. pic.twitter.com/VLxKmQdKi9
— The Kobeissi Letter (@KobeissiLetter) March 12, 2026
Trump posted on Truth Social that Fed Chair Jerome Powell “should be dropping Interest Rates, IMMEDIATELY.” The post came on Thursday as oil markets reacted to news from Iran’s new Supreme Leader, Mojtaba Khamenei, who vowed to keep the Strait of Hormuz closed.
The Strait of Hormuz handles roughly one-fifth of the world’s oil supply. Keeping it shut disrupts not just energy markets but also fertilizer shipments, which analysts say will push food prices higher.
U.S. West Texas Intermediate crude settled at $95.70 per barrel on Thursday. That is a sharp rise from prices seen before the conflict began on February 28, when the U.S. and Israel launched strikes on Iran.
What the Data Shows
CME FedWatch data shows a 99.2% chance that the FOMC will hold rates steady at next week’s meeting. Before the conflict started, markets were pricing in two quarter-point cuts by the end of the year. Now they barely expect one.
Goldman Sachs revised its forecast on Thursday, now expecting PCE inflation — the Fed’s preferred measure, targeted at 2% — to rise to 2.9% by December. The bank pushed its first expected rate cut from June to September, with a second cut expected in December.
The last time the Fed made a rate cut outside of a scheduled meeting was March 15, 2020, during the COVID-19 pandemic. Analysts do not see conditions today as similar enough to trigger that kind of emergency action.
JPMorgan has warned of a potential market sell-off as investors begin pricing in a longer war. On prediction market Polymarket, the odds of the Iran conflict lasting until May have risen to 70%.
Trump’s Rate Cut Push and What Comes Next
Trump has nominated former Fed Governor Kevin Warsh as the next Fed chair to succeed Powell when his term ends in May. Trump has signaled he expects Warsh to be more willing to lower rates.
Despite that, Goldman Sachs analysts do not see a cut coming before September, and market expectations have shifted firmly in that direction.
To combat rising oil prices, the Trump administration is also considering waiving the Jones Act, which restricts shipping of energy products within the U.S. Trump has also authorized the Department of Energy to release 172 million barrels from the Strategic Petroleum Reserve.
