Donald Trump, in a post on his social media platform, Truth Social, again criticized Federal Reserve Chairman Jerome Powell, stating that Powell's dismissal "can't come fast enough." This follows Trump's past criticisms of Powell, who he appointed to his position in 2018 and who was reappointed by Joe Biden in 2022. Trump's statement has come after Powell's speech at the Economic Club of Chicago where he emphasized that Trump's trade policies are contributing to economic complications.
Powell refuted Trump's assertions that he published a report. He instead gave a speech and answered questions, where he explicitly stated that Trump's policies, particularly his tariffs, are hindering efforts to achieve full employment and price stability. Powell also addressed the market volatility, stating that, despite this volatility, the markets are functioning well and that the Federal Reserve will not be influenced by political pressure when setting interest rates.
The article highlights how Trump's economic and trade policies have negatively impacted the US economy since his return to power. The economy was on track for a successful soft landing before his return, but his policies are now hindering growth, and increasing inflation, and making it harder for the Federal Reserve to lower interest rates. The Federal Reserve has been repeatedly warning about increased uncertainty and the need for clarity on the impact of Trump's measures before altering interest rates.
Trump does not have the authority to remove Powell prematurely, although his potential for actions outside of legal parameters is hinted at. Senate Majority Leader Chuck Schumer criticized Trump's actions, emphasizing the importance of an independent Federal Reserve for a healthy economy. The article notes the inconsistency of Trump's criticisms, as he previously accused Powell of lowering interest rates too much and too little.