Donald Trump once again demands a cut in the Federal Reserve's interest rates, arguing that it will help accelerate economic growth. Meanwhile, Fed Chair Jerome Powell is exercising caution, waiting for further data.
Trump Calls for Rate Cuts
Recent data indicates that the U.S. economy is growing faster than expected, at a rate of 3% in the second quarter. Trump argues that rate cuts must happen urgently to improve the housing market and assist families in refinancing. On his Truth Social platform, Trump criticized Powell, stating that the Fed is acting 'too late.' The pressure on the Fed is increasing ahead of the upcoming FOMC meeting.
Powell Remains Cautious
During the July press conference, Jerome Powell stated that the Fed is not rushing to make decisions regarding rate cuts. He emphasized that the central bank needs to study the effects of tariffs and inflation trends before taking action. Powell also mentioned that some governors, appointed by Trump, were in favor of cuts, but the majority held firm. According to him, acting too quickly may reignite inflation.
Growing Internal Disagreements at the Fed
The latest FOMC meeting revealed significant internal disagreements: two governors dissented from the traditional position for the first time in over three decades. Christopher Waller and Michelle Bowman, both Trump appointees, argue that risks to jobs outweigh inflation concerns. Waller has urged the Fed to 'look through' short-term shocks from tariffs and focus on employment.
Thus, the situation regarding Fed interest rates remains uncertain, as Trump continues to apply pressure on the central bank, while Powell and his colleagues raise concerns about economic stability and inflation.
