President Trump has criticized Federal Reserve Chair Jerome Powell, calling him a knucklehead and insisting on lowering interest rates to one percent. These frequent attacks raise concerns about the independence of the central bank, as investors fear increased political control over monetary policy. Despite these pressures, Powell maintains that it is too early to cut interest rates due to potential disruptions. Additionally, Trump's administration is planning to impose substantial tariffs on key trading partners, further complicating the economic landscape. Economic adviser Kevin Hassett indicated Trump might consider firing Powell due to cost overruns in renovations at the Fed.
The US president's frequent barbs and threats to replace Powell have previously spooked markets, wary of what some investors see as an effort to bring the central bank and the crafting of monetary policy under greater political control.
Trump called Powell a knucklehead and insisted that he should lower interest rates, claiming that inflation is not currently a serious concern for the economy.
Kevin Hassett, an economic adviser to Trump, also stated over the weekend that the president might be able to fire Powell for cause, citing higher-than-expected expenses for the renovation of the bank's headquarters.
Trump said he is planning to place important US trading partners such as the European Union and Mexico under a 30 percent tariff starting on August 1.
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