Trump Calls for Fed Rate Cuts and Criticizes Jerome Powell Amid Economic Challenges
On Thursday, US President Donald Trump vocalized strong criticism of Federal Reserve Chair Jerome Powell, saying that the Fed should urgently lower interest rates. Trump described Powell’s reports as a 'complete disaster' and suggested that a change in leadership at the Fed is necessary.
"Jerome Powell should have lowered interest rates like the ECB a long time ago, but he definitely needs to lower them now. The firing of Powell cannot wait," Trump stated on his social media platform, Truth.
The European Central Bank (ECB) is poised to decrease interest rates for the seventh time, while Trump has reiterated his dissatisfaction with the Federal Reserve's approach, labeling recent reports as late and erroneous. He pointed out that oil prices have dropped, and the prices of essential goods, including eggs, have decreased, asserting that the US economy is benefiting from the tariffs imposed under his administration.
Despite pressure from Trump, Powell has indicated that further rate cuts are contingent on seeing more consistent evidence of a slowdown in US inflation, currently standing at 2.4%, which exceeds the Fed’s target of 2%. The current rate is set between 4.25% and 4.5%.
In a recent statement, Powell highlighted that available data suggests the solid growth expected in 2024 may have slowed in the first quarter, reflecting the ongoing tensions brought about by the trade war initiated by Trump.
Meanwhile, the ECB is expected to reduce interest rates by a quarter point this Thursday, from 2.5% to 2.25%, amid concerns that the trade conflict with the US will hinder economic recovery in the eurozone. As central banks on both sides of the Atlantic navigate these economic uncertainties, the calls for decisive action are becoming increasingly urgent.
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