The Fed won’t lower the fees Trump wants.
There is a Federal Reserve system We haven’t cut interest rates yet The economic forecast predicts “a meaningful increase in inflation over the course of this year,” Chairman Jerome Powell said at a legislative hearing Tuesday.
So far, the Fed has not touched on interest rates and has maintained its target rate from 4.25% to 4.5%, the current level since July 2023.
The decision to reduce rate reductions has won Powell President Donald Trump’s rage. Since taking office, Trump has been frequently Requested Powell’s interest rates are low. In a social media post Tuesday ahead of Powell’s Congressional testimony, Trump said he believes interest rates are “two to three points lower” than current levels.
“I hope Congress will truly work past this very stupid, hard-working person,” Trump wrote. “We will pay for his incompetence for years to come.”
In Powell’s testimony before the House Financial Services Committee on Tuesday, Congressional members (mostly Democrats) repeatedly asked the Fed chairperson what they think about Trump’s comments and policies, particularly on trade and immigration. Powell declined to comment every time, saying it was “inappropriate” for a central bank to comment on policy decisions by elected officials.
Powell repeated that he wanted to wait for the Fed to cut interest rates until the economy’s future becomes clearer.
“The rate will depend on the economic path, and that’s very uncertain,” Powell said.
Economic uncertainty has risen completely Trump’s tariff policydisrupted the global market. The stock market is almost recovering from their terrible April crater Fear will cause disruption to world trade. During this period of chaos, Powell regularly pointed out the fact that underlying data such as inflation and unemployment were strong. Powell claimed he gave the Fed time to wait before making a decision.
The main issue remains “timing, quantity, and sustainability” of the rise in inflation that could arise from Trump’s tariff policies, Powell said. What is expected is that tariffs will almost certainly cause a one-time spike in prices, which will settle. The fear is that it doesn’t happen and the prices remain high or even rising.
Despite tariffs being implemented in April, Powell said they may be unknown, but he doesn’t expect any effect to them, as they will start attacking businesses and consumers through the summer. Most importers already stocked up in stock before the tariff policy, but as their inventory decreases, they must begin purchasing collected items.
“I don’t think I’d have been expecting this before,” Powell said. “We think it’s time for us to see (impact) and if we don’t see it, it’s important. That’s important. So it’s important.
Powell’s waiting approach made him a few friends in the White House. The President ignored tradition by expressing his positive opinions on monetary policy, although not for political norms. It is usually reserved exclusively for the non-political Federal Reserve Committee. Sometimes Trump even meditated on Powell’s firing. He even had the possibility of appointing himself as a Fed chair.
Proponents of the reduction rate immediately believe it will help drive the economy and offset the expected decline in growth after tariffs put the brakes on business investments. After the latest consumer price index Report Earlier this month, Vice President JD Vance joined Trump and called for Powell.
“The president has been saying this for a while, and that’s even more clear: the Fed’s refusal to cut interest rates is a financial malpractice,” Vance said. I wrote it Above x.
An anonymous compilation of individual forecasts for Fed officials for 2025 released last week showed that medians are expected For two rate reductions By the end of the year.