Trump Posts on Social Media
"Powell's Remarks the Previous Day Were a Complete Mess"
U.S. President Donald Trump once again pressured Federal Reserve (Fed) Chair Jerome Powell to cut interest rates and mentioned the possibility of dismissal after Powell warned that Trump's tariff policies could lead to rising inflation and slower growth.
On the 17th (local time), President Trump stated on his social media platform Truth Social, which he created, "Jerome Powell of the Fed, who is always late and wrong, gave yet another typical, complete 'mess' report yesterday."
He claimed, "Oil prices are falling, and even food prices, including eggs, are going down," adding, "The U.S. is prospering because of tariffs."
Chairman Powell pointed out the previous day that the level and scope of tariff increases were beyond the Fed's expectations. He said, "The impact on the economy, including inflation and slower growth, will also be significant," and warned, "We may face a difficult scenario where the dual mandate of price stability and maximum employment conflicts." He ruled out the possibility of interest rate cuts or liquidity injections due to uncertainty. After Powell, who had refrained from commenting on tariff policies, expressed concerns about stagflation (rising inflation amid slowing growth), President Trump pressured Powell within a day.
President Trump, who has repeatedly called for interest rate cuts since his candidacy, also mentioned Powell's dismissal again.
He criticized, "The European Central Bank (ECB) is expected to implement its seventh interest rate cut," adding, "Powell should have cut rates long ago like the ECB, but he was too late." He continued, "He must cut rates now," and added, "Powell's dismissal must happen."
However, Powell is standing firm, stating that the Fed's independence is a legal matter and that President Trump does not have the authority to dismiss him. Powell's term runs until May 2026.
Scott Baesert, U.S. Treasury Secretary and economic chief of the second Trump administration, also supports guaranteeing Powell's term. In an interview with Bloomberg TV earlier this week, he said that the selection of Powell's successor would take place in the fall and described the Fed's independence regarding monetary policy as a "jewel box" that must be preserved.
Meanwhile, after President Trump posted on social media, the ECB lowered its deposit rate, the benchmark for its monetary policy, by 0.25 percentage points from 2.5% to 2.25% per annum.
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