Main to remember
- Former President Donald Trump urges the federal reserve to reduce rates.
- The president of the Fed, Jerome Powell, underlined the legal protection of the independence of the Fed.
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Trump once again increases the heat on the Fed chair, Jerome Powell, calling for rate reductions and floating the idea of dismissing him after Powell supported the independence of the Fed in a recent speech.
In a social article of truth early this morning, Trump criticized the Fed’s waiting approach to monetary policy and described the last report of Powell a “complete disorder”.
The president said that inflation was under control and argued that Powell should reduce rates like the European Central Bank (ECB) should do so.
“The ECB is expected to reduce interest rates for the 7th time, and yet” too late “Jerome Powell of the Fed, who is still too late and bad,” said Trump.
“Powell’s termination cannot come quickly enough!” Trump wrote, while noting that “the United States becomes rich in prices”.
Trump’s remark comes after Powell, speaking yesterday at the Chicago Economic Club, stressed that Fed autonomy is protected by law.
The president of the Fed said that the independence of the central bank had large bipartite support. He added that Congress has the power to modify the law governing the central bank, but suggested that such a change is unlikely.
“Our independence is a matter of law,” said Powell. “Congress has, in our status, we are not removable, except for the cause.”
“The independence of the Fed is widely understood and supported in Washington, Congress, where it really matters,” said Powell.
Powell firmly rejected the possibility of giving in to political influence.
“We are never going to be influenced by political pressure. People can say what they want,” he said. “We will do what we do strictly without taking into account political or other factors.”
Trump has constantly urged the central bank to reduce banking rates since the start of its second term.
“I will ask that interest rates drop immediately,” Trump said in a virtual address in January at the Davos World Economic Forum, saying that the drop in oil prices would allow the Fed to reduce rates to combat inflation.
After the Fed maintained the rates of 4.25% to 4.5% at the end of January, Trump criticized Powell on Truth Social, despite inflation measuring 2.9% in December, above the 2% target of the Fed. Trump argued that he could take up economic challenges by energy production, deregulation, rebalancing exchanges and the renewal of manufacturing.
Last month, following another Fed decision to keep stable rates, Trump has reduced rate reduction rate reductions in the realization of the truth to mitigate the economic impact of its planned tariff increases.
The Secretary in the United States of the Treasury, Scott Bessent, announced this week that the White House will begin to interview the candidates this fall to succeed Powell at the end of his mandate in May 2026.
The secretary of the Treasury expressed his support for the independence of the Fed despite Trump’s public calls to interest rate reductions. Bessent also noted that he maintains regular meetings with Powell and sees no sign of financial instability requiring emergency action.
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