Donald Trump has renewed his criticism of Federal Reserve Chair Jerome Powell, accusing him of being too slow to act on interest rate cuts. In a post on Truth Social, Trump referred to Powell as "too late Powell," blaming him for dragging his feet despite growing consensus across economic circles that rates should be lowered to support economic growth.
Trump believes the Fed’s delay could harm the economy, and questioned Powell’s judgment in light of improving inflation data.
At the last FOMC meeting in early May, Powell announced that interest rates would remain unchanged at 4.25% to 4.5%, the third consecutive meeting with no adjustment. Trump responded harshly, suggesting that Powell’s reluctance to cut rates ignores a shifting economic landscape. Trump previously considered removing Powell as Fed Chair during his presidency due to similar disagreements, and now, once again, he’s publicly expressing frustration at what he sees as a lack of urgency.
Despite softening inflation, Powell has argued that uncertainty remains due to inflationary pressure and the economic effects of ongoing trade tensions, particularly tariffs, which were significantly driven by Trump’s own policies. The Fed Chair emphasized that inflation has not fallen as expected and that a cautious approach remains necessary.
New economic data, such as the Producer Price Index (PPI), paints a potentially different story. The PPI dropped to 2.4% in mid-May, falling short of expectations and indicating that inflation could be cooling. Market watchers, including crypto investors, are closely monitoring the Fed’s next move, as lower interest rates tend to benefit digital asset markets by increasing investor appetite and liquidity. Trump’s vocal criticism could pressure the Fed, and any hint of a shift toward rate cuts may trigger a surge in crypto prices.
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