"Hey Buddy!" Trump pushes Fed to slash interest rates
Trump advocates for a reduction in federal interest rates
The Fed ain't touchin' those rates just yet, 'cause the heat from Trump's trade wars might push up inflation too damn high. And that's not what Trump wanted from the Fed folks.
The unpredictable prez, Donald Trump, has been pressurizing the US' central bank, the Fed, to reduce interest rates once more. "Do the right thing," Trump hollered on his platform, Truth Social. The economic uncertainties forced the Fed to stop further interest rate cuts on Wednesday, and they decided to keep the rate between 4.25% and 4.5%, labeling Trump's trade wars as the culprit.
Analysts expected this move. Fed Chair Jerome Powell underlined that the bank does not follow a fixed path, but they modify their monetary policy when required. According to their December forecast, the Fed said they'll stick to the two interest rate cuts predicted for 2025. The central bank also adjusted their growth forecast for the year and hiked their inflation expectation. Powell admitted that a good chunk of the price hikes could be chalked up to President Donald Trump's trade policies.
"I'm the experts' expert" - Trump
The Fed started cutting rates in September due to reduced inflation and a steady US labor market, ultimately slashing the rate by a whole point. In late January, they took a break despite President Donald Trump's call for an "instant" interest rate cut, preferably down to zero or even below. "I think I know better than the guy primarily responsible for this decision," Trump said, referring to Powell.
The Fed stated, "The uncertainty over economic developments has increased." Powell admitted that it's tough to predict how the economy will unfold right now. But he made it clear: "There'll be tariffs, and they slow growth. They boost inflation."
Since taking office on January 20, Trump has tagged tariffs onto goods from Canada, Mexico, and China, as well as on steel and aluminum imports. He partly reversed some of the tariffs on Canada and Mexico, but new tariffs, including those aimed at the European Union, are set to drop in early April. Trump scribbled on Truth Social that April 2 is "Independence Day" in America.
[1] federalreserve.gov[2] nytimes.com[3] bloomberg.com[4] forbes.com
- Donald Trump
- Fed
- Interest rates
- Tariffs
- The Fed's employment policy may soon come under review, as Donald Trump continues to pressure the central bank to reduce interest rates, citing his expectation of easing pressures from tariffs on employment prospects.
- As part of the community policy discussions, analysts are considering the potential impact of Trump's trade wars on the Fed's employment policy, given the link between inflation and unemployment, as admitted by Fed Chair Jerome Powell.
- The Fed has made adjustments to both their growth and inflation expectations, according to their latest monetary policy, which could potentially influence various aspects of their employment policy, in light of Trump's trade wars.
