Trump said that the atmosphere of the meeting with Powell was good and he believes that the Federal Reserve will soon cut interest rates.

President Trump said on Friday that he believes the Federal Reserve will soon start cutting interest rates, a day after meeting with Fed Chairman Powell. He said the meeting was positive and hinted that Powell was ready to adopt the looser monetary policy that Trump has been calling for for months. "I think we had a very good talk on the issue of interest rates," Trump said in an interview with the media, "He (Powell) told me, 'The economic condition of this country is good,' in a very firm tone." Trump added, "From this, I understand that he should start suggesting rate cuts." Despite Trump's optimism, Powell and other Fed officials remain cautious about whether to cut interest rates. They want to further observe the impact of Trump's tariffs on inflation. In fact, Powell has previously stated that the current economy remains strong and is able to withstand higher interest rates, so there is no rush to adjust the policy. Before Trump made these remarks, White House Office of Management and Budget Director Russell Vought expressed dissatisfaction with the "refurbishment project" of the Fed and continued to pressure for a comprehensive review of the Fed, while again urging a quick rate cut. Vought said in an interview that the White House hopes to support the overall economy, especially the real estate market, through loose monetary policy. "There are many questions about the Fed," he said, "We want to ensure that these questions are ultimately answered." However, he also emphasized, "This is not an attempt to put pressure on the Fed Chairman." The meeting marked a thaw in relations between the White House and the Fed. For the past several months and even years, the relationship between the Trump administration and the Fed led by Powell has been tense, but after the meeting both sides described the atmosphere as good. The Fed said in a statement on Friday that they welcomed the visit of the President and other Republican officials and felt "honored." "We appreciate the President's attention and encouragement for this important project," a Fed spokesman said, "We will continue to carefully manage public resources to ensure the project's successful completion." However, the White House said they still plan to push forward with the review of the overall operations of the Fed proposed by Treasury Secretary Mnuchin. In addition to questioning the renovation project at the Fed headquarters and the rate policy, officials also expressed concerns about the Fed's ongoing operation of the fiscal deficit. In the past, the Fed would transfer its investment income to the Treasury Department. But in the current high-interest rate environment, the interest paid by the Fed to banks on reserves is higher than its investment income, resulting in a deficit of nearly $80 billion by 2024. "We will continue to express policy concerns about the way the Fed is managed," Vought emphasized. "You can't serve on the Fed without being subject to criticism, that's not in line with the normal practices of the U.S. political system." During the meeting with Powell, Trump reiterated his belief that Powell and his colleagues will eventually accept the need for a rate cut. "I believe the Chairman will make the right decision," he said, "Although it may be a bit late, he will do the right thing." Despite having previously criticized Powell harshly and openly considered replacing him, Trump has recently retracted those comments and reiterated on Thursday that he does not think Powell needs to resign. However, the market does not show expectations of an imminent rate cut. Rate futures data show that the market hardly believes the Fed will cut rates at the meeting next week, with the earliest possible time for a rate cut being in September, and a slightly higher likelihood of another rate cut before the end of the year.