This summer is going to be heated in terms of economic and geopolitical battles. US President Donald Trump has dramatically ramped up his attacks on Federal Reserve Chairman Jerome Powell, calling him a “dummy” and once again demanding a sharp rate cut. According to the president, such a move would help reduce the annual interest payments on the US national debt, which amount to $600 billion.

Trump’s latest assault on Powell came after two inflation reports showed lower-than-expected consumer and factory inflation in the US. Against this backdrop, the president stated, “A 2 percentage point rate cut would save America $600 billion a year, but we can’t get Powell to do it! So we’re going to waste $600 billion a year because of one dummy who sits there and says he doesn’t see enough reason to cut rates right now.” The president said he would support rate hikes if inflation were rising, but right now, it is falling.

According to Citi analysts, since US inflation is slowing faster than expected, the issue of rate cuts may come onto the Federal Reserve’s monetary policy agenda as early as September 2025.

Citi analysts believe that the rapid deceleration of core inflation in the US is the main driver behind potential monetary easing. The bank’s experts forecast a gradual reduction in the official funds rate totaling 125 basis points, starting in September.

Citi economists support early rate cuts, pointing out that the US core CPI inched up by 0.13% in May from a month ago.

“Softer core inflation dynamics will boost Fed officials’ confidence that price increases propelled by tariffs won’t result in sustained inflationary pressure,” Citi noted. However, the analysts expect some upward pressure from tariffs by the end of the summer.

Citi’s forecasts show that the core PCE price index in May was just 2.6% year-over-year, and it is expected to slow further as housing costs decline. Meanwhile, monthly inflation data in the US is being “closely monitored by the Federal Reserve for any signs of tariff impact, but so far the trend remains downward.” Given the current situation, especially amid rapidly cooling inflation, Citi experts suggest that Trump may not have to wait long for the monetary policy easing he is so aggressively demanding from Jerome Powell.