President Donald Trump launched on Monday a new series of insults in the president of the FED, Jerome Powell, while reiterating a call to lower interest rates, a measure destined to address concerns about a slowdown in the US economy, but that runs the risk of reviving inflation.
In a publication about Truth Social, Trump said without evidence that the “preventive cuts” were being called “by many” now that the economy faced what he described as “practically without inflation.”
The economy now runs the risk of decreasing, Trump said: “Unless Mr. Too Late, a large loser, reduces interest rates, now.”
“Powell has always been ‘late’, except when it was the electoral period when he went down to help Sleepy Joe Biden, later Kamala, be chosen. How did that work?”
Although Trump has long criticized Powell, whom he appointed during his first term, the president’s complaints have increased in recent days in the middle of an important market reaction to his rate shock.
The economic advisor Kevin Hassett also said last week that the administration was “study (ING)” Trump’s options to eliminate Powell.
Shooting Powell would be an unprecedented movement: no president has eliminated a fed chair. Historically, Fed has been a non -political part of the government, and the possibility that Trump take measures has caused concern that inflation would increase while forcing the central bank to alleviate its role in controlling prices growth in favor of economic growth.
The markets extended their losses after the position, with the S&P 500 falling more than 2% and now dropped almost 16% since its February peak, while the Dow Jones Industrial Avenge decreased 750 points, or approximately 2%. Bond yields were reduced, which means that investors sought greater protection in safe assets.
When referring to the deceleration economy, Trump can be more in tune with the negative shock than its rates strategy is creating for growth.
A growing choir of Wall Street companies and analysts increasingly foresee the US economy that enters a recession, something in real time of gross internal products (GDP) is also shown.
While it is true that the inflation rate has slowed from 9% higher at the height of the pandemic, the measure of the growth of the prices most observed by the Fed remains above its objective of 2% and actually accelerated in February.
Not all White House officials seem to be on board Powell. Last week, Treasury secretary, Scott Besent, told Bloomberg TV that the administration would begin to interview the candidates for Powell’s successor this fall, and added that he would give the Trump administration about six months of time before Powell officially leaves the position when his mandate is next year. He did not give more details.
