President Donald Trump criticized Fed Chair Jerome Powell and called for lower interest rates to address concerns about a slowing U.S. economy. Trump claimed that “preemptive cuts” were needed due to “virtually no inflation.” He accused Powell of being “too late” in lowering interest rates during the election period to benefit Joe Biden and Kamala Harris. Trump’s complaints against Powell have intensified following market reactions to his tariffs policy, with economic adviser Kevin Hassett suggesting the administration was studying options to remove Powell. However, firing a sitting Fed chair would be unprecedented and could lead to a surge in inflation as the central bank prioritizes economic growth over price control. The financial markets reacted negatively to Trump’s comments, with the S&P 500 and Dow Jones Industrial Average both declining. While Trump may be recognizing the negative impact of his tariffs on economic growth, some Wall Street analysts predict a recession. While inflation has slowed from pandemic highs, it remains above the Fed’s 2% target. Not all White House officials agree with pressuring Powell, with Treasury Secretary Scott Bessent indicating the administration would begin interviewing candidates for Powell’s successor.
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