Trump hammers Federal Reserve Chair again

It looks like Federal Reserve Chair Jerome Powell’s wait-and-see approach has garnered the ire of President Donald Trump, again.

Trump believes it’s about time for the central bank to cut interest rates as the economic conditions in the United States begin to ease. However, Powell believes that it won’t be appropriate to begin cutting rates until later in the year, claiming that inflation is expected to rise again according to forecasts he’s seen. The president took to Truth Social to vent his disapproval with this wait-and-see approach from the Federal Reserve.

Look:

“‘Too Late’ Jerome Powell, of the Fed, will be in Congress today in order to explain, among other things, why he is refusing to lower the Rate. Europe has had 10 cuts, we have had ZERO. No inflation, great economy – We should be at least two to three points lower,” Trump wrote on Tuesday. “Would save the USA 800 Billion Dollars Per Year, plus. What a difference this would make. If things later change to the negative, increase the Rate. I hope Congress really works this very dumb, hardheaded person, over. We will be paying for his incompetence for many years to come. THE BOARD SHOULD ACTIVATE. MAKE AMERICA GREAT AGAIN!”

Powell spoke to the House Financial Services Committee during a routine scheduled testimony, defending the Federal Reserve’s monetary policy and explaining his reluctance to cut rates.

“The Federal Reserve remains squarely focused on achieving our dual-mandate goals of maximum employment and stable prices for the benefit of the American people. Despite elevated uncertainty, the economy is in a solid position. The unemployment rate remains low, and the labor market is at or near maximum employment. Inflation has come down a great deal but has been running somewhat above our 2 percent longer-run objective. We are attentive to the risks to both sides of our dual mandate,” Powell’s report reads.

“Our monetary policy actions are guided by our dual mandate to promote maximum employment and stable prices for the American people. With the labor market at or near maximum employment and inflation remaining somewhat elevated, the Federal Open Market Committee (FOMC) has maintained the target range for the federal funds rate at 4-1/4 to 4-1/2 percent since the beginning of the year. We have also continued to reduce our holdings of Treasury and agency mortgage-backed securities and, beginning in April, further slowed the pace of this decline to facilitate a smooth transition to ample reserve balances. We will continue to determine the appropriate stance of monetary policy based on the incoming data, the evolving outlook, and the balance of risks,” it continues.

“Policy changes continue to evolve, and their effects on the economy remain uncertain. The effects of tariffs will depend, among other things, on their ultimate level. Expectations of that level, and thus of the related economic effects, reached a peak in April and have since declined. Even so, increases in tariffs this year are likely to push up prices and weigh on economic activity,” Powell adds, directly addressing the president’s economic agenda.

“The effects on inflation could be short lived—reflecting a one-time shift in the price level. It is also possible that the inflationary effects could instead be more persistent. Avoiding that outcome will depend on the size of the tariff effects, on how long it takes for them to pass through fully into prices, and, ultimately, on keeping longer-term inflation expectations well anchored,” the report notes, giving a reason as to why Powell is hesitant to make a move on interest cuts.

Writer/Columnist

Sierra Marlee is a millennial whose hunger for the truth in a world of fake news has led her to BizPac Review.

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