President Donald Trump robbed a fresh humiliation with Fed Chairman Jerome Powell on Monday, repeating his call for lower interest rates.
In a post about the True Society, Trump argued without evidence that “first cuts” are being called “many” by “many” as the economy faces what he describes as “virtually no inflation.”
Trump said he is currently at risk of slowing the economy.
“Powell was always ‘late’, but how did that work, except for the election period he lowered to help sleepy Joe Biden, who would later be elected by Kamala? ”
Trump has long criticised Powell, whom he appointed in his first term, but the president’s complaints have risen on a recent day amid a major market response to his tariff shock.
Economic adviser Kevin Hassett last week said the administration was Trump’s option to eliminate Powell.
Powell’s firing will be an unprecedented move. The Fed has historically been a non-political part of the government, and the prospect of Trump taking action has sparked concerns that inflation will surge as central banks forced it to support economic growth and facilitate its role in controlling price growth.
The market extended its losses after the post, with the S&P 500 down more than 2%, now down nearly 16% from its February peak, with the Dow Jones industrial average down 750 points or about 2%. Bond yields moved low, and investors were sought greater protection for safe inventory assets.
In referring to the slower economy, Trump may be more adapting to the negative shocks his tariff strategy is creating for growth.
The growing chorus of Wall Street companies and analysts increasingly foresee the US economy’s downturn.
It is true that inflation has dropped from a 9% higher height at the height of the pandemic, but the most closely observed measure of price growth by the Fed exceeded the 2% target and actually accelerated in February.
Not all White House officials appear to be on the rise of pressure on Powell. Last week, Treasury Secretary Scott Bescent told Bloomberg Television that the administration will begin interviewing Powell’s candidates for successor this fall, adding that he will give the Trump administration a lead time of about six months ago before Powell officially takes office when his term ends next year. He gave no further details.