Mr. Trump criticized the Fed Chairman for considering lowering interest rates

He criticized Mr. Powell’s consideration of lowering interest rates, saying this was intended to give the Democratic Party an advantage in the 2024 US presidential election.

“It looks to me like he’s trying to lower interest rates to help someone get elected. I’m not sure, but I think he’ll do something to help the Democrats. If he lowers interest rates, maybe so,” Mr. Trump said in an interview broadcast by Fox Business Network last Friday.

Mr. Trump also revealed that there were “several options” for Fed Chairman in case he is elected president of the United States for another term, but refused to reveal who they were.

At a press conference last Wednesday, after the Fed ended its regular monetary policy meeting, Mr. Powell said that the Fed was considering lowering interest rates from their highest level in decades – a pivot from the Fighting inflation by increasing interest rates dramatically over the past 2 years. However, Mr. Powell ruled out the possibility of the Fed raising interest rates in March, causing financial markets to shift expectations about when the Fed might conduct its first rate cut to May, or even in the second half. of this year.

Mr. Powell’s caution has a reasonable basis in the fact that recent data show that the US economy is still strong, although inflation maintains a downward trend. A report from the US Department of Labor on Friday showed that the economy created 353,000 new jobs in January, far exceeding analysts’ forecasts. A strong economy poses the risk of inflation “flashing” again if the Fed lowers interest rates too soon.

In the above interview, Mr. Trump accused Mr. Powell of bringing politics into the process of considering monetary policy. This accusation is a continuation of a series of attacks that Mr. Trump has aimed at Mr. Powell since he appointed Mr. Powell as Fed Chairman in 2017. Mr. Powell was reappointed to the position by President Joe Biden. This year in 2021. The Fed Chairman is an unfireable position, but each US President is responsible for nominating a candidate every 4 years for Congress to approve.

The relationship between Mr. Trump and Mr. Powell has not been very warm since Mr. Powell became the most powerful central bank leader in the world. At that time, Mr. Trump accused Mr. Powell of raising interest rates of harming the US economy. The Fed – by its nature as a non-political and independent agency – ignored Mr. Trump’s attacks.

Throughout Mr. Trump’s previous term, Mr. Powell refused to answer many questions at press conferences about Mr. Trump’s tweets aimed at him and the Fed. Instead, he continued to assert that the Fed is entirely focused on its dual mission of improving job growth and keeping inflation low.

When the Fed lowered interest rates to near zero in an emergency response to Covid-19 becoming a global pandemic in early 2020, Mr. Trump offered rare praise for the US central bank.

According to economic theory, raising interest rates is intended to slow down growth and thereby fight inflation. However, a side effect of rising interest rates is that governments, consumers and businesses have to pay higher interest on debt. Raising interest rates is indispensable in an economic cycle, but politicians often tend to complain when interest rates are high.

However, Mr. Trump’s continuous attacks on the Fed and the Fed Chairman during his previous term in office were unprecedented, both in frequency and directness. Every time Mr. Trump posts a status (tweet) on Twitter – now X – about the Fed or Mr. Powell, the US financial market fluctuates.

Also in the Fox interview, Mr. Trump said that the US stock market’s recent increase was thanks to him, that the market went up because investors “thought I would be elected.”

At a press conference last week, when asked if he wanted to hold the position of Fed Chairman for another term, Mr. Powell replied that he did not pay attention to this.

“I have no opinion on this. That’s something I don’t pay attention to. I’m focused on doing our mission. This year will be a very important year for the Fed and monetary policy, and we are all determined and focused on the job,” he said.

Trả lời

Email của bạn sẽ không được hiển thị công khai. Các trường bắt buộc được đánh dấu *