Former US President Donald Trump has once again strongly attacked Federal Reserve Chairman Jerome Powell. This time the matter is about cutting interest rates. Trump says that Powell “always comes too late and his decisions are wrong.”
Trump said in his post on the social media platform Truth Social that Powell should have reduced interest rates long ago, so that the US economy could get strengthened. Citing the example of the European Central Bank, he said that Europe has already cut rates several times, while the US is still behind.
Table of Contents
- Criticism Over Interest Rate Delay
- Trump’s Demand for Powell’s Removal
- Powell’s Response: ‘We Will Wait’
- White House vs Fed: A History of Conflict
- Tariff Policies and Economic Concerns
- Can Powell Be Removed? Legal Viewpoint
- Is This Part of Trump’s 2024 Strategy?
- Conclusion: Politics vs Economic Decisions
Demand to remove Fed Chair
Trump did not stop here. He clearly said that there is no justification for Powell to remain in the post now. “Powell should be removed from the post as soon as possible,” Trump wrote in his post. He also added that the prices of essential commodities like oil and eggs are falling, and the US is benefiting from tariffs (import duty) – in such a situation, interest rates should have been cut.
Powell's answer: "We will wait"
Earlier, Powell had said in a speech in Chicago that the Federal Reserve would not make any change in interest rates at the moment, and would wait for further economic information. He indicated that no decision would be taken in haste in view of the current global situation and uncertainty of trade policies.
Powell also said that US tariff policies could increase inflation and the common people may have to pay the price for it. He also added that the recent volatility in the market is a natural effect of changes in trade policies and the Fed does not need to intervene in it.
White House vs Fed: Confrontation intensifies
This conflict between Trump and Powell is nothing new. Trump has questioned the policies of the Fed many times before. But this time the matter has become more heated because inflation, unemployment and tariff related volatility are at their peak in the US.
Trump demands that the Fed immediately cut interest rates to boost economic activity. At the same time, the Fed believes that if rates are reduced in a hurry, it can have a negative impact on both inflation and unemployment.
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Tariff policy became the root of the controversy
Trump’s tariff policies have already caused a stir in international trade. Major trading partners like China and Europe are angry with America’s policies. At the same time, investors are also worried that if the trade war escalates further, the US economy could move towards recession.
Powell said that due to the current policies, the Fed is faced with the challenge of how to balance inflation and unemployment. He warned that if any hasty steps are taken, the US economy could suffer further damage.
What will happen next?
Now the big question is, can Powell really be removed on Trump’s demand? According to the US Constitution, the President can remove the Fed Chairman only under certain circumstances – such as serious ethical violations or allegations of misuse of office are proven.
So far, there has been no official statement on this issue from President Biden or his administration. But experts believe that this statement of Trump may be part of his 2024 election agenda, through which he again wants to strengthen the image of economic nationalism and ‘America First’ among the public.
Conclusion
This fight between Fed Chairman Jerome Powell and Trump has taken not only economic but also political color. While Trump is calling it necessary to give impetus to the economy, Powell says that the Fed needs to take decisions independently, based on data.
The impact of this confrontation can also be seen on the US dollar, stock market and cryptocurrency markets in the coming days. Now it will be interesting to see in which direction this tug of war between the Fed and the White House goes in the coming weeks.
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