Trump lambastes Federal Reserve Chairman Jerome Powell, labeling him as unintelligent, prior to the announcement of the interest rate decision.
Going Off the Rails: Trump Slams Powell, Fed in Rate Spat
President Donald Trump takes yet another swipe at Federal Reserve Chair Jerome Powell ahead of the June decision on interest rates, labeling him a "stupid person."
At a press conference yesterday, the commander-in-chief said, "We have a stupid person, frankly, over at the Fed." This announcement came mere hours before the central bank decides on monetary policy.
Trump continued, "He probably won't cut today. Europe had 10 cuts and we had none. I guess he's a political man, I don't know. He's a political guy who's not a smart person. But he's costing the country a fortune."
The Fed, as expected, is predicted to leave interest rates unchanged this week, marking the fourth straight meeting with no change. The benchmark federal funds rate has remained at a target range of 4.25% to 4.5% since the Fed’s last interest rate cut in December.
Dr. Vance, Vice President, has expressed similar sentiments, urging the Fed to cut rates, deeming the refusal to do so a form of "monetary malpractice."
According to President Trump, "If he's worried about inflation, that's okay, I understand that. I don't think there's going to be any, so far there hasn't." The president further added, "We have a man who just refuses to lower the Fed rate. Just refuses to do it. And he's not a smart person."
It's important to note that the Fed and Powell have faced intense political pressure from the Trump administration to lower rates to stimulate the economy. Goldman Sachs and other economists warn that undercutting the independence of the central bank carries significant economic repercussions. Public criticism by political leaders may lead to lower investor and market confidence, causing financial market volatility and potentially higher borrowing costs.
The central banking system functions best when politicians refrain from exerting undue influence over its operations, enabling the central bank to make decisions based on economic data and conditions free from political interference.
- The Fed and Powell have faced intense political pressure from the Trump administration, with President Trump urging them to lower interest rates to stimulate the economy.
- Goldman Sachs and other economists warn that undercutting the independence of the central bank carries significant economic repercussions, including lower investor and market confidence, financial market volatility, and potentially higher borrowing costs.
- If left unchecked, the ongoing spat between President Trump and Federal Reserve Chair Jerome Powell over interest rates and monetary policy could have broader implications for the general news and economy, as the central banking system functions best when politicians refrain from exerting undue influence over its operations.
