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Vice President JD Vance is echoing President Donald Trump’s growing frustration with the Federal Reserve, accusing the central bank of stalling on interest rate cuts and labeling the inaction as “monetary malpractice.”
In a post on X (formerly Twitter) on Wednesday, Vance criticized the Fed’s decision to hold interest rates steady despite fresh economic data showing inflation cooling more than expected. “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.
His comments came just hours after the release of new inflation figures. Core inflation which excludes volatile categories like food and energy rose just 0.1% in May, while the annual headline rate slowed to 2.4%. Both metrics were below economists' forecasts, strengthening the case among some policymakers and analysts for a reduction in borrowing costs.
Vance’s statement underscores the intensifying political pressure on the Fed from the White House. President Trump has repeatedly voiced his dissatisfaction with the Fed’s approach this year, ramping up criticism of Chair Jerome Powell and urging the central bank to begin cutting rates immediately. During a speech at the World Economic Forum in January, Trump declared he would “demand” rate cuts, citing the need to reduce costs for American borrowers.
The president has not held back in personal attacks against Powell, calling him a “fool,” a “major loser,” and “Too Late” in numerous posts on Truth Social. He also stirred controversy earlier this year by suggesting he might remove Powell a claim he later walked back following negative market reaction.
Despite political pressure, the Fed has maintained its stance, opting to leave rates unchanged as it monitors the potential inflationary impact of newly enacted tariffs under Trump’s administration. While the recent inflation readings suggest easing price pressures, the central bank has expressed concern that tariffs could stoke inflation later in the year.
In remarks following the Fed’s May policy meeting, Powell directly addressed the risks posed by the administration's trade policies. “If the large increases in tariffs that have been announced are sustained, they are likely to generate a rise in inflation, a slowdown in economic growth, and an increase in unemployment,” Powell said. He added that the inflationary effects of tariffs could be temporary or potentially more entrenched, depending on how the situation evolves.
The Fed’s hesitance to cut rates has drawn increasing criticism from Trump allies, who argue that high interest rates are weighing on consumer sentiment and stalling economic momentum heading into the 2025 election cycle. Trump, who made low rates a key part of his economic platform in his first term, has vowed to bring borrowing costs down swiftly if re-elected.
However, Fed officials remain cautious. They’ve emphasized that while inflation is trending in the right direction, it remains above the central bank’s 2% target and the full economic impact of tariffs may not yet be reflected in the data.
For now, markets are left in limbo. Investors are pricing in the possibility of rate cuts later in the year, but the Fed’s communication suggests a higher bar for policy easing than political leaders would prefer.
As the standoff continues, JD Vance’s remarks add another high-profile voice to the growing chorus pressuring the Fed and highlight how monetary policy is becoming an increasingly prominent battleground in Washington’s broader political narrative.
