Federal Reserve Chair Jerome Powell shares the Federal Reserve’s six-annual monetary policy report.
President Donald Trump called the Federal Reserve on Tuesday, saying central banks should cut interest rates.
“We need to lower interest rates. This is something we’ll be holding hands with future tariffs!!!” Trump said in a post about Truth Society. “Rock and roll, America, America!!”
The president’s comments come the day after Federal Reserve Chairman Jerome Powell said on Capitol Hill that the central bank doesn’t need to “hurry” to lower interest rates.
The Federal Reserve holds interest rates steady amid inflation uncertainty
“We don’t have to hurry to adjust our policy stance,” Powell testified Tuesday before the Senate Banking Committee. “I know that policy suppression too quickly or too much can hinder inflationary progress, while at the same time, slow or too little can lead to unfair weakening of economic activity and employment if policy suppression is slow or too little can lead to unfair reductions in economic activity and employment. It’s there.”
Federal Reserve Chairman Jerome Powell testified before the Senate Banking Committee on February 11, saying the central bank “doesn’t have to hurry to adjust our policy stance.” . (Mandel Ngan / via AFP / Getty Images)
Fed officials stabilized benchmark federal funding rates in the range of 4.25% to 4.5% at their latest meeting in January.
Trump says he won’t fire Chairman Jerome Powell
It follows three consecutive interest rate cuts at the central bank’s latest meeting. This includes a 50 base point reduction in September and a 25 base point reduction in November and December.
A January statement from FOMC said the Fed continues to pursue its dual mission to achieve maximum employment and inflation in the long term. “The economic outlook is uncertain and the committee is paying attention to risks on both sides of the dual mission,” he added.
Trump’s post on Wednesday is not the first time the president has commented on interest rates this year. He said in a speech to the World Economic Forum in January that he plans to lower oil prices. He said energy prices to deal with inflation should serve as a driving force for the Fed to cut interest rates.
“When oil prices drop, we demand that interest rates fall soon. And likewise, they should fall all over the world. Interest rates should follow us,” Trump said.
Before the World Economic Forum in Davos, Switzerland, Trump said he would ask for interest rates to be lower than current levels. Signs that he may be setting a chance of fighting the Federal Reserve.
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At a press conference following the Federal Reserve’s January rate decision, Powell was asked by a reporter whether he had responded to Trump’s comments to the World Economic Forum. Reporters asked if Trump told him the request and if he told him whether he had the effect of such a comment by the president.
“I have no responses or comments about what the president said, and it’s not appropriate for me to do so,” Powell said at the time.
