When Trump Says "Cut Rates," Traders Say "Not So Fast"

​Donald Trump saw a booming jobs report and took it as his cue to call for interest rate cuts. The bond market, however, wasn’t buying it.

Just minutes after April’s job data hit—showing stronger-than-expected hiring—Trump cranked up pressure on Fed Chair Jerome Powell to slash rates. But traders saw the exact opposite: an economy still running hot and inflation lingering above the Fed’s 2% target. So instead of betting on rate cuts, they backed off. Yields on two-year Treasuries surged, and expectations for a June rate cut evaporated.

Strong Data, Steady Fed
The market pivot was swift. Not only was job growth solid, but manufacturing data also looked better than feared. That combo had futures traders moving their rate-cut timelines out to July or September. Goldman Sachs and Barclays both adjusted their forecasts, agreeing the Fed is likely to wait.

“The Fed’s in no rush,” said JPMorgan’s Priya Misra. “If the data turns, they’ll move. But right now, they’re holding steady.”

Trump vs. Powell: A Familiar Standoff
Trump hasn’t been shy about going after Powell, even suggesting he could fire him—before later retreating. His administration insists the Fed is dragging its feet, citing past dips in Treasury yields as a market cry for help.

But Powell’s team remains cautious. They’ve been stung before by runaway inflation and are determined not to repeat past mistakes. Tariffs may push prices higher in the short term, but that doesn’t mean it’s time to panic.

Still a Chance for Cuts Later
Despite backing off the idea of an immediate cut, traders still think it’s coming. Many now expect up to three cuts this year, especially if Trump’s trade policies start to drag down growth. As Subadra Rajappa at Societe Generale said: “The Fed will hold as long as they can — and when they cut, they’ll cut aggressively.”

The Bottom Line
Trump’s public push for rate cuts isn’t moving the Fed—at least not yet. With the economy still looking sturdy, Powell is holding his ground. The message from bond markets is clear: until the data says otherwise, the Fed’s staying patient.








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