Washington (AP) – President Donald Trump criticized Federal reserve President Jerome Powell Thursday, reiterating his frustration that the Fed has not aggressively reduced interest rates and saying that “the termination of the Central Bank chief cannot come quickly enough”.
Trump managed to move to Fire Powell, whose mandate did not express before May 2026. Powell reported that the Fed will maintain its unchanged key interest rate while seeking “greater clarity” on the impact of policy changes in areas such as immigrationTaxation, regulation and price.
Trump and his economic team members said they would like longer -term interest rates to drop, making Americans cheaper to borrow to buy houses, cars and devices. However, the Fed controls a short -term rate and can only indirectly affect the longer -term borrowing costs, which increased after Trump announced scanning prices.
Powell also reiterated that Trump prices would probably increase inflation and slow down the economy, which could make Fed more difficult to reduce rates anytime soon. In the remarks on Wednesday in Chicago, the president of the Fed suggested that the central bank will focus on the fight against inflation following prices, even if the functions weakened the economy. Powell’s comments contributed to a drop in stock prices on Wednesday.
“Oil prices are declining, grocery stores (even eggs!) Are declining and the United States becomes rich in prices,” said Trump in an article on social networks.
Referring to the European Central Bank, he added that Powell “should have reduced interest rates, such as the ECB, a long time ago, but it should certainly lower them now. Powell’s dismissal cannot come quickly enough! ”
AP Audio: Trump takes interest rates and says that the termination of the Fed Powell pulpit cannot come quickly enough ‘
The AP Washington correspondent Sagar Meghani reports that President Trump is more frustration towards the president of the Fed, Jerome Powell, on interest rates.
The European Central Bank Thursday has reduced its key interest rate 2.5% to 2.25%.
Powell was initially Nominated by Trump in 2017and he was appointed to another four -year term By President Joe Biden in 2022. At a November press conference Powell said he would not resign if Trump asked him to resign.
He also declared that the withdrawal or demotion of the senior officials of the Fed was “not authorized by law”.
Trump’s comments come with the backdrop of A legal affair at the Supreme Court This could determine if the presidents can dismiss independent agencies such as the Fed.
The case stems from Trump’s layoffs from two independent agencies. The Supreme Court last week Leave the shots While he considers the case. This could make a broader decision this summer which would allow the president to dismiss officials of the Fed, including the president.
Powell said the Fed looks closely, adding that it may not apply to the Fed. Lawyers of the Trump administration also argued that allowing the president to dismiss the two officials would not erode the independence of the Fed.
“It is difficult to overestimate the consequences at this stressed moment of a court decision which revealed that President Trump … has the power to reject the independent agencies and did not establish a clear protrusion for the Fed,” Krishna Guha, analyst of the investment bank Evercore Isi on Thursday. “If you liked the price debacle on the markets, you would like the trade in loss of loss.”
In an interview with Mid-Campaign in 2024 with Bloomberg News, Trump said that he would allow Powell to serve his mandate as president, which ended in May 2026.
Earlier this month, Trump’s best economic adviser, Kevin Hassett, said in a television interview that “there will be no political coercion on the Fed, for sure.”
Powell began Trump’s second term in a relatively safe place with a low unemployment rate and inflation progressing closer to the 2% target of the Fed, conditions which could have spared the President’s American Central Central Banker.
But Trump’s aggressive and random rates increased the threat of a recession With both higher inflationary pressures and slower growth, a difficult position for Powell, whose mandate is to stabilize prices and maximize employment. The economy weakening due to Trump’s choices, the president seems to try to blame Powell.
Powell, in its remarks at the Chicago Economic Club on Wednesday, said that the Fed will base its decisions only on what is best for all Americans.
“This is the only thing we are going to do,” said Powell. “We are never going to be influenced by political pressure. People can say what they want. It’s good, it’s not a problem. “
“Our independence is a matter of law,” continued Powell. “We are not removable, except for the cause. We serve very long, apparently endless terms. ”
Trump triggered a rash of prices that put the American economy and the Fed in an increasingly perilous place. On April 2, the president rolled up Aggressive tariff increases based on American trade deficits with other nations, causing a financial market reaction which almost immediately led him to announce A 90 -day break in which most countries would be billed a reference rate of 10% while negotiations are advancing. But Trump increased its price increases on China at a rate of 145%, in addition to its existing prices on Canada, Mexico, cars and steel and aluminum.
Wall Street banks such as Goldman Sachs have increased their probability that a recession can begin. Consumers are more and more pessimistic In surveys on their job prospects and fearing that inflation increases as the cost of import taxes is transmitted to them. The risk of stagflation – stagnant growth and high inflation – would make the Fed more difficult to respond with the same manual as recent slowdowns.
The Laboratory of the Budget of the University of Yale estimated that the increase in inflationary pressures of the prices would be equal to the loss of $ 4,900 in an average American household.
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Journalists from AP Sagar Meghani and Christopher Rugaber contributed.
