Trump pushes back against Fed rate-hike bets following strong US jobs report

US President Donald Trump said the Federal Reserve would be making a mistake if it raised interest rates, even as investors increasingly expect tighter monetary policy following a stronger-than-anticipated labor market report.

In an interview with NBC’s Meet the Press, Trump pushed back against market expectations that the central bank may need to lift borrowing costs to keep inflation under control.

“Nowadays when you have good reports, the market goes down because they think they’re going to raise interest rates,” Trump said. “There’s no reason to raise interest rates.”

His remarks come as Fed Chair Kevin Warsh prepares to lead his first Federal Open Market Committee meeting on June 16-17.

“We should actually lower interest rates.”

According to Trump, increasing the benchmark interest rate would be “the wrong thing to do.”

The comments underscore the political and economic pressures surrounding Warsh as he takes charge of monetary policy at a time of persistent inflation and resilient economic growth.

Market sentiment shifted sharply after Friday’s employment report showed US job creation in May exceeded economists’ forecasts. The stronger labor-market data triggered a selloff in Treasury bonds and prompted traders to fully price in a quarter-percentage-point rate increase by the end of the year.

Trump selected Warsh to lead the Federal Reserve after repeatedly criticizing the central bank and urging policymakers to reduce interest rates. Although Trump has since said that Warsh should make independent decisions, his latest remarks suggest lingering concerns about the possibility of tighter monetary policy.

The bond-market reaction and changing expectations for Fed policy reflect growing belief among investors that the central bank may need to raise rates to prevent inflation from remaining above its target.

“I’m living with Kevin,” Trump said. “I have a lot of respect for him, but my feeling is that when a country is doing well, they shouldn’t be penalized by immediately raising interest rates.”

“You know, we have debt, we have other things,” he added, “We have things we want to take care of. I want to go bigger on the military.”

Following the jobs report, economists at Goldman Sachs abandoned their forecast for a Fed rate cut in December 2026. While they still anticipate two quarter-point reductions, they now expect those cuts to occur later, in June and December 2027.

Expectations of higher rates were further strengthened by the latest labor-market figures. Data from the Bureau of Labor Statistics showed that nonfarm payrolls rose by 172,000 in May, while previous months’ figures were revised upward. The unemployment rate remained unchanged at 4.3%, indicating continued strength in the job market.

With public approval weighed down by concerns over the Iran conflict, economic management, and elevated fuel prices, Trump has argued that robust employment and economic growth can help ease inflationary pressures without the need for higher interest rates.

“Now, if inflation comes, and, you know, people live with inflation, but if inflation comes what happens is you stamp it out,” he told NBC. “But success can kill inflation just like higher interest rates.”