Golden Finance reported that US President Trump has recently once again targeted Federal Reserve Chair Jerome Powell, sharply criticizing his monetary policy decisions and calling Powell a “fool” because the Fed has not taken measures to cut interest rates. Trump firmly believes that cutting interest rates can bring significant benefits to the US economy.
On Thursday local time, Trump said straightforwardly in a speech at an event at the White House: “If interest rates are cut by 200 basis points, the United States can save 600 billion US dollars every year.” We waste 600 billion US dollars for nothing every year just because a “fool” (referring to Powell) claimed, “I don’t think there is sufficient reason to cut interest rates at present.” Trump’s remarks this time once again highlight the huge differences between him and the Federal Reserve in the direction of monetary policy.
Trump further elaborated on his view, saying that if inflation data rises, he agrees that the Federal Reserve will take interest rate hikes to stabilize the economic situation. But he emphasized: “The current inflation rate is on a downward trend. Under such circumstances, the Federal Reserve should cut interest rates. I may have to take certain measures to prompt it to act.” Since the start of his second term, Trump has publicly expressed his dissatisfaction with the Federal Reserve’s monetary policy on multiple occasions, frequently urging the Fed to cut interest rates, in an attempt to boost the US economy and alleviate the government’s debt burden.
Previously, Trump strongly criticized Powell on multiple occasions. During his first presidential term, he repeatedly accused Powell of cutting interest rates too late and threatened to remove him from the position of chairperson of the Federal Reserve. Powell, however, has always emphasized that the Federal Reserve will independently formulate monetary policy based on economic data and will not be disturbed by political factors. Trump’s recent escalation of his criticism of Powell has drawn intense attention from the financial market. Investors are closely watching the subsequent monetary policy direction of the Federal Reserve and whether Trump will take practical actions to influence the Fed’s decisions. So far, the Federal Reserve has not made an official response to Trump’s remarks.
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