Donald Trump has once again criticized Federal Reserve Chair Jerome Powell, accusing him of indecisiveness regarding interest rate cuts.
Trump Criticizes the Fed's High Rates
At a White House event, Trump referred to Powell as a 'numbskull' and claimed that cutting rates by just one percentage point could save the US $300 billion annually. He argues that the Fed's slow actions are making it harder to manage the country's rising debt and increased borrowing costs.
Officials Call Fed's Inaction 'Monetary Malpractice'
Other officials in Trump's administration have also voiced their dissatisfaction with the Fed's actions. Commerce Secretary Howard Lutnick and Vice President JD Vance have criticized Powell's stance, labeling it 'monetary malpractice.' They believe that the Fed's reluctance to cut rates is harming the economy, especially as inflation eases and energy prices decline.
Complications of Possible Powell Dismissal
While Trump has the constitutional power to remove Powell, such a decision could rattle markets. Legal experts suggest that this move would undermine the Fed's credibility and likely cause long-term interest rates to spike. Trump seems aware of these potential consequences, which may explain his hesitation to take action.
With energy prices falling and inflation data remaining stable, Trump's calls for rate cuts may intensify. However, how the Fed will respond and whether Trump will act on his threats remains uncertain.
