President Trump went after the Federal Reserve again on Tuesday and said during a meeting in Michigan that “I have a FED person who doesn't really work.”
It was a clear reference to FED chairman Jerome Powell, although he did not mention Powell by name with Trump who said: “I want to be very nice and respectful for the Fed.”
“You are not supposed to criticize the Fed; you are supposed to let him do his own thing, but I know much more than he does about interest rates, believe me,” he added.
It was the last sign that the president is not going to resolve the central bank or her chairman or to insist on lower interest rates a week after he said that he “is not going” to dismiss the central bank boss.
Trump himself fired speculation about Powell's fate after Trump had claimed on social media earlier this month that “Powell's termination cannot come fast enough.”
The certainty that he would not try to remove Powell helped to calm investors, worryed that Trump was ready to increase the leadership of the Fed and to challenge its independence directly.
It was apparently a step that was considered. Kevin Hassett, economic adviser to the White House, said that Trump and his team were in fact studying whether the FED chair could be removed.
Trump's attacks on Powell emerged after Powell said earlier this month in a speech that the president's aggressive rates would lead to higher inflation and lower growth and that the FED would probably keep the rates stable for the time being.
Lower economic growth would recognize on the horizon, Trump, in a social media post of April 21, called for “preventive tariff reductions” and Powell referred as a “big loser”.
“There may be a delay in the economy, unless Mr. Too Late, a great loser, now lowers the interest rates.”
Many other FED officials outside of Powell have also insisted on patience and caution before they have made some interest switches, given the many uncertainties that are for us.
New lectures on inflation and GDP are due on Wednesday morning, which are closely studied for the next policy meeting of the FED on 6-7 May.
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