Trump intensifies pressure on Fed's Powell over rate policy
The President of the United States, Donald Trump, has ramped up his criticism of Federal Reserve Chairman Jerome Powell in recent days. He labelled the head of the central bank a "major loser," but stated on Tuesday that he does not intend to dismiss him. However, he is demanding action regarding interest rates.
US President Donald Trump has recently intensified his criticism of the policies pursued by Federal Reserve Chairman Jerome Powell. On his social media platform, he wrote that if the head of the central bank does not promptly cut interest rates, the economy will significantly slow down.
Earlier, Trump had said he couldn't wait for Powell's "termination," which fueled speculation about the possible dismissal of the Fed chair. The US president also suggested that if he wishes, the central bank's chairman, whose term ends next year, would have to leave his position.
During the swearing-in ceremony of Securities and Exchange Commission (SEC) Chairman Paul Atkins, Trump revisited the issue.
- I would like to see him uh be a little more active in terms of his idea to lower interest rates. This is a perfect time to lower interest rates. Uh if he doesn't, is it the end? No. It's not, but it would be good timing. It would be it would it should could have taken place earlier, but no, I have no intention to fire him - Trump said.
Relations with China
The US president also touched upon trade relations with China, promising that he would be "very nice" in discussions with Chinese leader Xi Jinping. Trump suggested that tariffs on Chinese products could be reduced following the conclusion of a trade agreement.
- I’m not going to say, ‘Oh, I’m going to play hardball with China, I’m going to play hardball with you, President Xi.’ No, we’re going to be very nice. We’ll see what happens. But ultimately, they have to make a deal, because otherwise they’re not going to be able to deal in the United States - he added.
Trump's comments caused concern on the financial markets, leading to declines on Wall Street. Powell had previously signalled that he would hold off on lowering interest rates, citing uncertainty and the potential inflationary pressures caused by Trump's tariffs.
According to reports from Bloomberg, Treasury Secretary Scott Bessent stated at a closed conference organised by JP Morgan bank that negotiations with China will be a slog. He also reportedly said that the US does not intend "decoupling," or breaking economic ties with China, although the current level of tariffs - 145% on products from China and 125% on products from the US - effectively amounts to an embargo.
