Vance has again publicly called on the Federal Reserve to cut interest rates.
US Vice President Vance once again publicly pressured the Federal Reserve to lower interest rates—at this time, the Fed chairman personally nominated by Trump began to "turn hawkish."
On Thursday, September 3, Vance stated at a White House press briefing, "We believe the Fed should cut interest rates," calling it a "correct and responsible" response to recent inflation data. He added, "We're doing a lot to keep interest rates low, but it would be even better if we could get some help from the Fed."
Vance directly linked his call for interest rate cuts to housing affordability. He stated, "The president cares a lot about interest rates, partly because he wants Americans to be able to afford homes, and the higher the interest rates, the higher the cost of borrowing."
According to CNBC, Vance made the remarks when asked about the Trump administration's views on the volatility in the U.S. bond market.
This statement comes less than two weeks before the Federal Open Market Committee (FOMC) holds its interest rate decision meeting on September 15-16. According to CME Group's FedWatch data, traders are currently almost evenly divided on whether there will be a rate hike at this meeting, resulting in a high degree of market uncertainty.
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A direct confrontation with Walsh's position
Vance's remarks create a clear tension with the latest signals from within the Federal Reserve.
Less than a week ago, Warsh, the Federal Reserve Chairman personally nominated by Trump, delivered a speech in Jackson Hole, Wyoming, making it clear that he was committed to pushing inflation back to the 2% target and characterizing short-term interest rates as the "primary tool" for achieving the dual mandate—which was interpreted by the market as hinting at the possibility of interest rate hikes.
Opinions within the Federal Reserve are also divided. On Tuesday, Fed Governor Michael Barr said he was prepared to support raising interest rates if inflation remained high; however, on Thursday morning, Governor Waller said he preferred to keep rates unchanged.
This isn't the first time pressure has been applied; they did the same thing in June.
This is not the first time Vance has publicly pressured the Federal Reserve.
In June of this year, after the U.S. Bureau of Labor Statistics released the May CPI data, Vance joined forces with Trump on the X platform to simultaneously urge the Federal Reserve to cut interest rates. At that time, the May CPI rose by only 0.1% month-on-month, and the core CPI also rose by only 0.1% month-on-month, with annual rates of 2.4% and 2.8% respectively, still higher than the Federal Reserve's 2% target.
Vance used a stronger wording at the time, writing directly: "The president has said this before, but it is now clearer: the Fed’s refusal to cut interest rates is a failure of monetary policy."
Around the same time, Trump also posted on a "real social" platform, calling on the Federal Reserve to lower interest rates by one percentage point, emphasizing that "this is very important," arguing that a rate cut would save the U.S. a lot of interest payments on its upcoming debt maturities.
The independence controversy continues to escalate.
According to CNBC, Vance's latest remarks may further exacerbate concerns about the erosion of the Federal Reserve's independence.
Trump had previously pressured Warsh's predecessor, Powell, to cut interest rates significantly, and is currently seeking to fire Federal Reserve Governor Lisa Cook.
The Federal Reserve last cut interest rates in December 2024. Since then, officials have continued to express concern about the risk that tariffs could push up future prices, and have held rates steady until now.
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