A feud is brewing between President Donald Trump and the Federal Reserve following critical remarks made by Fed Chairman Jerome Powell regarding the economy. Just hours after the Fed's top official expressed concerns over the ongoing trade war and the implications of tariffs, the president took to Truth Social to suggest that the chairman's time at the helm may be nearing its end.
The tension is palpable, as the president’s response came as no surprise after Powell's assessment. The Central Bank leader emphasized the challenges ahead, noting that higher inflation is likely and economic growth is expected to stall due to elevated tariffs that exceed earlier projections.
His extensive speech, marking the first significant commentary since the escalation of the trade war with China, underscored the uncertainty many families face in planning their finances as the economic landscape shifts.
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In his stern Truth Social post, President Trump criticized the Fed's actions, calling attention to the European Central Bank's recent decision to cut interest rates for the seventh time, while expressing dissatisfaction with the U.S. Federal Reserve's timely response.
President Trump wrote, “The ECB is expected to cut interest rates for the 7th time, and yet, ‘Too Late’ Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete ‘mess!’ Oil prices are down, groceries (even eggs!) are down, and the USA is getting RICH ON TARIFFS. Too Late should have lowered Interest Rates, like the ECB, long ago, but he should certainly lower them now. Powell’s termination cannot come fast enough!”
Later on Thursday, President Trump would not say if he regrets nominating Powell, who became the Federal Reserve chair during the president's first term.
"The only thing that's going up actually is interest rates because we have a federal reserve chairman that is playing politics," he said.
As financial markets reacted negatively to the chairman's remarks, falling both yesterday and this morning, the possibility of a new change at the Federal Reserve looms large. President Trump previously hinted during the last campaign that he may consider firing the Fed chairman should he disagree with his economic strategies, though such a drastic move could invite legal challenges similar to past terminations of other government officials.
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As the unfolding drama continues, it is clear that the relationship between the White House and the Federal Reserve is under significant strain, with far-reaching effects for both domestic and global financial stability.
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