The Blubber

Vice President Vance sharply criticized the Federal Reserve on Wednesday, echoing President Trump’s long-standing frustrations with the central bank after new data showed consumer prices rose more slowly than expected in May.

In a post on X, Vance accused the Fed of failing in its dual mandate to balance inflation and employment through interest rate policy.

“The president has been saying this for a while, but it’s even more clear: the refusal by the Fed to cut rates is monetary malpractice,” Vance wrote.

The Labor Department’s consumer price index (CPI) report, released Wednesday, showed prices rose just 0.1 percent in May, slightly below Wall Street’s forecast of a 0.2 percent increase. The annual inflation rate stood at 2.4 percent, matching expectations but remaining just above the Fed’s 2 percent target.

President Trump has repeatedly argued that the Fed should move aggressively to lower interest rates and stimulate the U.S. economy. With inflation now well below the peak levels seen during the Biden administration, Trump insists the Fed must act — particularly given that other central banks around the world have already begun cutting rates, despite their weaker economic fundamentals.

Trump’s anger with the Fed flared again last year, after the central bank began trimming interest rates ahead of the 2024 election. He accused Fed Chair Jerome Powell, a lifelong Republican, of attempting to influence the election outcome in favor of Democrats.

That frustration has grown in 2025, especially after Powell and other Fed officials indicated they were likely to keep rates steady amid economic uncertainty linked to Trump’s new tariffs and the ongoing resilience of the U.S. economy.

The Fed’s March projections suggested at least two rate cuts are still likely this year. However, May’s cooler inflation report may not be enough to speed up that timeline.

“The Federal Reserve should be encouraged, but the incoming data doesn’t appreciably increase the odds that the central bank cuts rates before December, which is our baseline,” wrote Ryan Sweet, chief U.S. economist at Oxford Economics.
“The Fed will be reactionary and want to see how inflation does this summer when the tariffs hit inflation harder.”