President Donald Trump on Monday continued his criticism of Federal Reserve Chair Jerome Powell, calling him a “major loser” and saying the central bank should make “preemptive cuts” to interest rates.
“‘Preemptive cuts’ in Interest Rates are being called for by many,” Trump wrote in a post on Truth Social. “With Energy Costs way down, food prices (including Biden’s egg disaster!) substantially lower, and most other ‘things’ trending down, there is virtually No Inflation.”
“With these costs trending down so nicely, just what I predicted they would do, there can almost be no inflation, but there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW,” he continued.
TRUMP CALLS FOR FED’S POWELL TO CUT INTEREST RATES AND ‘STOP PLAYING POLITICS’
Trump’s comments come after he said in a Truth Social post last week that Powell is “always TOO LATE AND WRONG” and that, “Powell’s termination cannot come fast enough.”
Trump said at a press conference on Thursday that Powell “should do the rate cuts” because the European Central Bank has cut interest rates, adding, “I’m not happy with him – I let him know it. If I want him out, he’ll be outta there real fast. Believe me.”
Powell has said that he intends to serve out the remainder of his term as chair of the Federal Reserve, which ends on May 15, 2026.
FED’S POWELL STAYING PUT EVEN IF TRUMP HAS ANOTHER IDEA
At a press conference that followed a Federal Reserve monetary policy meeting the day after Election Day in November, Powell was asked if the president has the power to fire or demote him and whether the Fed had determined the legality of demoting other Fed governors in leadership positions.
“Not permitted under the law,” Powell said. He also said that he would not resign in response to a request from Trump for him to do so.
FED CHAIR POWELL SAYS TARIFFS LIKELY TO CAUSE INFLATION TO RISE, COULD BE PERSISTENT
Trump’s repeated criticisms of Powell and the Federal Reserve have raised concerns about the long-term independence of the Fed as it makes monetary policy decisions.
Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said Sunday in an appearance on CBS’ “Face the Nation with Margaret Brennan” that the independence of central banks and monetary policy is crucial.
“There’s virtually unanimity among economists that monetary independence from political interference, that the Fed or any Central Bank be able to do the job that it needs to, is really important,” Goolsbee said.
“And they came to that not as a theory, but just by looking around the world at places where they don’t have monetary independence. And the fact is, the inflation rate is higher, growth is slower, the job market is worse. So, we really – I strongly hope that we do not move ourselves into an environment where monetary independence is questioned, because that – that would undermine the credibility of the Fed.”
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