In a recent bill signing ceremony, President Donald Trump took a jab at Federal Reserve Chair Jerome Powell, calling him a “numbskull” and claiming that the lack of rate cuts is costing the US $600 billion a year in short-term debt payments.
Trump believes that if Powell would just lower the federal funds rate by 2 percentage points, the government would save a whopping $600 billion a year. But, as always, Powell remains unconvinced.
In May, the Federal Open Market Committee (FOMC) decided to maintain the target range for the federal funds rate at 4.25-4.5%, arguing that it’s the most suitable level to achieve maximum employment and controlled inflation. The Fed has kept interest rates steady since December, when it cut the rate by 0.25%. Trump, however, is not happy with this decision.
Despite his frustration, Trump says he’s not planning on firing Powell. Instead, he’s just going to keep calling him names and hoping for the best. 😜
“We’re going to spend $600 billion a year – $600 billion – because of one numbskull that sits there [and says] ‘I don’t see enough reason to cut the rates now.’ And the problem he’s got, and I explained to him… cut your rates now, there’s no inflation. We got it down, we got prices down.”
Inflation did rise by 2.4% in May, according to the Bureau of Labor Statistics, but that was slightly less than the 2.5% increase predicted by economists. So, Trump might have a point, but Powell remains unconvinced.
Powell met with Trump last month, but the Fed noted in a statement following the meeting that Powell did not discuss interest rate expectations with the president. Instead, Powell stressed that the path of policy will depend entirely on incoming economic information and what that means for the outlook.
Trump has been quite vocal about his displeasure with Powell’s decisions, even going as far as calling him “Too Late Powell” because he’s always, well, too late. 🙄 But Trump remains confident in the strength of the US economy, saying that it’s so strong and powerful that it can handle a little bit of Powell’s indecisiveness.
Read More
2025-06-13 20:01