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Trump says inflation data means Fed can cut interest rates

BY Reuters | ECONOMIC | 09:42 AM EST

WASHINGTON, Jan 13 (Reuters) - President Donald Trump welcomed December inflation figures released on Tuesday, saying they supported his push for Federal Reserve chair ?Jerome Powell to cut interest rates.

The closely watched ?core CPI year-on-year figure came in at ?2.6%, less than the 2.7% ?markets ?had expected. The overall annual inflation rate was 2.7%, ?matching November's gain.

"We ?have very low inflation. That would give 'too late Powell' the chance ?to give us ?a nice ?beautiful big rate cut," Trump told reporters before departing for Detroit.

Earlier Tuesday, ?Trump posted on social media that the inflation numbers mean Powell "should cut interest rates, MEANINGFULLY."

But consumer prices increased in December from November, cementing expectations the ?Federal ?Reserve would leave interest rates unchanged this month.

Trump has clashed repeatedly ?with Powell over the president's demand the Fed cut rates.

The administration's decision to open a criminal investigation into Powell drew condemnation from former Fed chiefs and a chorus of ?criticism from key members of Trump's Republican Party on Monday.

(Reporting by Gram Slattery and Susan Heavey, ?writing hy David Ljunggren;Editing by Doina Chiacu)

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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