Federal Reserve cuts interest rate, signals two more cuts this year

Separately, Trump’s attempted firing of Cook is the first time a president has tried to remove a Fed governor in the central bank’s 112-year history, and has been seen by many legal scholars as an unprecedented attack on the Fed’s independence. His administration has accused Cook of mortgage fraud, but the accusation has come in the context of Trump’s extensive criticism of Powell and the Fed for not cutting rates much faster and steeper.

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An appeals court late Monday upheld an earlier ruling that the firing violated Cook’s due process rights. A lower court had also previously ruled that Trump did not provide sufficient justification to remove Cook. Also late Monday, the Senate voted to approve Miran’s nomination, and he was quickly sworn in Tuesday morning.

On Tuesday, Trump said Fed officials “have to make their own choice” but added that “they should listen to smart people like me.” Trump has said the Fed should reduce rates by three full percentage points.

The Fed’s move to cut rates puts it in a different spot from many other central banks overseas. Last week, the European Central Bank left its benchmark rate unchanged, as inflation has largely cooled and the economy has seen limited damage, so far, from US tariffs. On Friday, the Bank of England is also expected to keep its rate on hold as inflation, at 3.8 per cent, remains higher than in the United States.