Golden Finance reported that US President Trump recently spoke out again on the monetary policy of the Federal Reserve, sharply expressing his dissatisfaction with Federal Reserve Chair Powell. Trump made it clear that although he had no intention of firing Powell, he openly called him a “fool” on the grounds that Powell failed to push the Federal Reserve to cut interest rates.
On Thursday local time, Trump delivered a speech at an event at the White House, elaborating on his views on interest rate cuts. He believes that if the Federal Reserve cuts interest rates by 200 basis points, the United States could save up to 600 billion US dollars each year. Trump said excitedly in his speech, “We spend 600 billion dollars every year just because a ‘fool’ is sitting here and saying, ‘I don’t see enough reasons to cut interest rates now.'”
This is not the first time that Trump has expressed objections to the monetary policy of the Federal Reserve. Since the beginning of this year, he has publicly called on the Federal Reserve to cut interest rates on multiple occasions, believing that such cuts can stimulate economic growth and alleviate the debt burden of the US government. In this speech, Trump also added that if inflation rises, he agrees with the Federal Reserve raising interest rates, “but now the inflation rate is falling, and I may have to take some measures.” He emphasized that the current inflation rate is on a downward trend. Under such circumstances, the Federal Reserve should adapt to the situation and choose to cut interest rates.
Previously, Trump posted on his social media platform “Real Social” that, citing the latest performance of the US consumer price index (CPI) as ideal, he called on the Federal Reserve to cut interest rates by one percentage point, claiming that in this way, the United States would save a significant amount of money on the interest of its soon-to-expire debts. On June 6th, he also posted on social media, accusing the “late Mr.” of the Federal Reserve (alluring to Powell) of being a disaster. At that time, Europe had cut interest rates ten times, while the United States had not made a single move. He demanded that Powell cut interest rates by a full percentage point.
Since Powell officially took office as the chair of the Federal Reserve in February 2018, he has always emphasized the independence of the Federal Reserve based on economic data in monetary policy decisions. Facing the continuous pressure from Trump to cut interest rates, Powell insisted that as president, Trump has no legal authority to remove him from office and that he will remain in office until the end of his term. However, Trump’s frequent criticism and tough attitude have undoubtedly brought considerable public opinion pressure to the Federal Reserve’s decision-making and also raised market concerns about the independence of the Federal Reserve’s monetary policy. At present, the market is closely watching the subsequent monetary policy direction of the Federal Reserve and how the game between Trump and Powell over the issue of interest rate cuts will end.
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