Trump Calls in the «Loser» from the Fed
Fed Chairman Jerome Powell has so far successfully ignored pressure from US President Donald Trump on the issue of lower interest rates. Now he has had to appear in person at the White House. The meeting was probably not without differences of opinion.
On Thursday (local time), US President Donald Trump invited Federal Reserve Chairman Jerome Powell to the White House for his first face-to-face meeting since taking office in January.
Following the meeting, the Fed published a communiqué stating that the central bank will stick to its monetary policy course. «Fed Chairman Powell did not speak about his expectations for monetary policy,» it said. He emphasized to the President that the course of monetary policy will depend entirely on incoming economic data and its impact on the outlook.
Fed Chairman Jerome Powell (Image: Shutterstock)
Ha had told Trump that he and his colleagues at the Fed «will set monetary policy as required by law to support maximum employment and stable prices, and will make these decisions based solely on careful, objective, and non-political analysis».
Tensions not Eased
White House spokeswoman Karoline Leavitt, said she and the president had seen the Fed's statement and confirmed its contents, as reported by «Reuters». However, she added: «The president has said that he believes the Fed chairman is making a mistake by not lowering interest rates, which puts us at an economic disadvantage to China and other countries.»
This has not defused the tensions between Trump and Powell. In recent months, Trump has called the central banker either a fool, a major loser or «Mr. too late» and even threatened to dismiss him.
Market Does not Expect Interest Rate Hike until September
At the beginning of May, the Fed's Open Market Committee again left the key interest rate in the range of 4.25 to 4.50 percent, where it has been since December. It was also signaled that this level could be maintained for a few more months. They will wait until there is more clarity about the consequences of the customs policy.
The tariffs and political uncertainty could slow down the economy and lead to persistently higher inflation, according to concerns.
The financial markets are currently pricing in an interest rate cut by the Fed in September and a second one in December.
