Trump Blasts ‘destructive’ Powell After Fed Holds Steady on Interest Rates
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Former President Donald Trump unleashed a barrage of criticism against Federal Reserve Chair Jerome Powell on Thursday, labeling him “destructive” after the central bank opted to maintain steady interest rates on Wednesday. The Federal Open Market Committee (FOMC) decided to hold its borrowing rate targeted in a range between 4.25%-4.5% (Federal Reserve Meeting Calendars).
Trump’s Criticism of Powell
Trump asserted that Powell’s policies are costing the United States “hundreds of billions of dollars” by not implementing interest rate cuts, echoing his long-standing disapproval of the Fed chair’s decisions. He voiced his concerns on Truth Social, stating that interest rates should be significantly lower to save money on national debt.
Did You Know? The Federal Reserve’s dual mandate is to promote maximum employment and stable prices (Board of Governors of the Federal Reserve System).
These remarks follow similar criticisms made by trump late Wednesday, where he referred to Powell as a “real dummy” in another Truth Social post. The former president has a history of publicly pressuring the Federal Reserve to lower interest rates, a move that Powell has largely resisted.
Federal Reserve’s Stance
Powell, whose term is set to conclude in May 2026, stated on Wednesday that the Fed is “well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policies.” this cautious approach reflects the central bank’s strategy to monitor economic indicators before making any significant changes.
Pro Tip: Monitoring the Consumer Price Index (CPI) and the Producer Price Index (PPI) can provide insights into potential future interest rate adjustments (U.S. Bureau of labor Statistics).
Impact of Interest Rate Decisions
The Federal Reserve’s decision to maintain current interest rates has broader implications for the economy. These rates influence borrowing costs for consumers and businesses,impacting everything from mortgage rates to corporate investments. Keeping rates steady can help control inflation, but it may also temper economic growth.
trump has even suggested he would consider appointing himself to lead the Federal Reserve,claiming he would “do a much better job.” He also mentioned plans to announce his pick for the next chair of the Federal Reserve “very soon.”
Key figures
| Metric | Value |
|---|---|
| Federal Reserve Target Rate | 4.25%-4.5% |
| Jerome powell’s Term End | May 2026 |
Political Implications
Trump’s ongoing criticism of Powell highlights the political tensions surrounding monetary policy. His remarks underscore the potential for political interference in the decisions of the Federal Reserve,which is intended to operate independently.
How might future presidential administrations influence the Federal Reserve’s policies? What are the potential risks and benefits of political influence on monetary policy?
Evergreen Insights: Understanding the Federal Reserve’s Role
the Federal Reserve System, frequently enough referred to as the Fed, is the central bank of the United States. It was created by Congress to provide the nation with a safer, more flexible, and more stable monetary and financial system. The Fed conducts the nation’s monetary policy, supervises and regulates banks, maintains the stability of the financial system, and provides financial services to depository institutions, the U.S. government,and foreign official institutions.
the FOMC, a committee within the Federal Reserve, is responsible for making key decisions about interest rates and the money supply. These decisions are crucial for managing inflation and promoting economic growth. The Fed’s independence from political influence is considered vital for maintaining the credibility of its monetary policy decisions.
Frequently Asked Questions About Federal Reserve Policies
- What is the Federal Funds Rate?
- The federal funds rate is the target rate that the FOMC wants banks to charge one another for the overnight lending of reserves. It influences other interest rates throughout the economy.
- How does the Federal Reserve control inflation?
- The Federal Reserve primarily controls inflation by adjusting the federal funds rate. Raising the rate makes borrowing more expensive, which can slow down economic activity and reduce inflationary pressures.
- What is quantitative easing (QE)?
- Quantitative easing is a monetary policy tool used by central banks to stimulate the economy by purchasing government securities or other assets. This increases the money supply and lowers interest rates.
- Why is the Federal Reserve independent?
- The Federal Reserve’s independence is designed to insulate monetary policy decisions from short-term political pressures, allowing the Fed to focus on long-term economic stability.
- What are the risks of low interest rates?
- Prolonged periods of low interest rates can lead to asset bubbles, excessive risk-taking, and inflation. They can also reduce the returns on savings and investments.
Disclaimer: This article provides general information and should not be considered financial advice. Consult with a qualified financial advisor before making any investment decisions.
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