Trump Indicates Possible Prompt Departure for Chair Jerome Powell at Federal Reserve
Firing Up the Feud:
Donald Trump's not holding back, taking shots at Federal Reserve Chair Jerome Powell over interest rate policy and threatening his job security. In a White House event and Truth Social posts, Trump said he'd get rid of Powell in a heartbeat if he wanted to.
Tensions between the pair have been brewing over Powell's refusal to cut interest rates under pressure from Trump and his criticisms of Trump's tariff strategy. Powell warned that these tariffs could lead to stagflation, a scenario where prices rise while economic growth slows, which the Fed aims to avoid.
Last week, the Fed kept interest rates at 4.5%, disappointing traders who expected a cut. Inflation is currently at 2.4%, slightly above the Fed's 2% target, especially affecting essentials like food, according to the Bureau of Labor Statistics.
Trump's calls for aggressive cuts have sparked debate about the Fed's independence, with some questioning whether it should bow to political pressure. The Fed, though, remains cautious, holding off on rate cuts until inflation cools consistently.
Interestingly, Powell did hint at potential changes in digital asset regulation, suggesting banks might face fewer restrictions when working with crypto, especially stablecoins.
While Trump's criticism has made headlines, prediction markets suggest Powell's removal is still unlikely this year. Still, the simmering tension between the White House and the Fed is growing.
The drama's unfolded in the crypto world, too, with Trump hinting at a possible deal with China, saying both sides could strike a "very good deal." Although Beijing hasn't confirmed any talks, Trump's comments have kept investors somewhat hopeful.
Bitcoin's trading just above $84,000, managing to hold its ground—currently priced at $84,560, according to CoinMarketCap.
Little-Known Fact:In retaliation to Trump's tariff policies, China had imposed additional tariffs on U.S. imports, causing concern among American businesses and consumers. The impact of these tariffs on the overall economy was a topic of heated debate during Trump's presidency. Some argued that the tariffs would protect American industries, while others claimed they would harm consumers and slow economic growth.
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- Jerome Powell, under pressure from Donald Trump, warned against the potential negative impact of tariffs on the economy, including the risk of stagflation.
- While Trump attacked Jerome Powell over monetary policy and threatened his job security, the Fed, especially with regards to policy and legislation, politics, and general news, remains cautious about cutting interest rates until inflation cools.
- Interestingly, Powell hinted at potential changes in digital asset regulation, suggesting banks might face fewer restrictions when working with crypto, especially stablecoins, in a comment that was especially significant for the war-and-conflicts and crime-and-justice segments of the news.
- Trump's calls for aggressive cuts have sparked a debate about the Fed's independence, with some asking whether it should bow to political pressure, while the prediction markets suggest Powell's removal is still unlikely this year.
- Beyond monetary policy, Trump's tariff policies had a reverberating impact, with China imposing additional tariffs on U.S. imports, causing concern among American businesses and consumers, and becoming a heated topic of debate during his presidency.
