Trump Cheers Strong Jobs Data, Renews Attack On Fed's Powell: Rates 'Should Be Much Lower'

The May employment report delivered a stronger-than-expected performance, fueling optimism across markets and a full-throated celebration from President Donald Trump—who simultaneously stepped up his public campaign to push Federal Reserve Chair Jerome Powell toward cutting interest rates.Nonfarm payrolls rose by 139,000 last month, topping forecasts of 130,000. Wage growth also beat expectations, with average hourly earnings climbing 0.4% month over month and 3.9% year over year. The unemployment rate held steady at 4.2%.Trump reacted swiftly on Truth Social, hailing the numbers as proof of the economy's continued strength under his leadership: “Great job number, stock market up big!,” Trump wrote. But beyond celebration, the president issued another sharp call for aggressive monetary easing, targeting Powell directly."‘Too Late' at the Fed is a disaster!" Trump posted. "Europe has had 10 rate cuts, we have had none. Despite him, our Country is doing great. Go for a full point, Rocket Fuel!" He added that "borrowing costs should be much lower," indicating that inflation is no longer a concern and that delaying action would "cost our Country a fortune."Economists Say Fed Can Take Its TimeDespite Trump’s renewed pressures on Powell, most economists reading the May jobs report say the data gives the Federal Reserve more reason to remain cautious—not less.Economist Mohamed El-Erian said the report sent a "clear message" that the central bank can afford to delay any cuts, given that "both May job creation and wage growth were higher than consensus forecasts."Bill Adams, economist of Comerica Bank struck a similar tone, suggesting "the Fed will notice deterioration at the edges," but not enough to justify action in the near term.Steve Wyett, chief investment strategist at BOK Financial noted the "deleterious impacts of uncertain tariff policies have yet to be fully reflected," adding that while the Fed remains in a holding pattern, the door remains open to cuts later this year.Jeffrey Roach, chief economist at LPL Financial described the labor market's slowdown as "quite smooth so far without many surprises." He said that, although payroll growth is moderating, the economy remains on stable footing and the Fed has no reason to act quickly.Money markets now expect the first interest rate cut to come by October 2025, with CME Group's FedWatch tool showing an 83% chance of a second cut in December.Markets Rally In Response, Treasury Yields RiseInvestors welcomed the report. The S&P 500 – as tracked by the SPDR S&P 500 ETF Trust SPY – broke above 6,000 points, rising 1.1% on Friday. The Nasdaq 100 gained 1.2% to 21,800. The tech-heavy index now trades at less than 2 percentage points below record highs. The bond market responded with higher yields, as traders dialed back expectations for imminent Fed action. The 10-year Treasury yield climbed 6 basis points to 4.47%, while the 30-year yield rose 5 points to 4.93%. The U.S. dollar index gained 0.5%, and gold slipped 0.9% to $3,330 an ounce. Peak Pessimism On US Treasuries? History Says A Summer Rally May Be Near Image created using photos from Shutterstock.