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Trump's Frustration: Will Powell Face Dismissal Over Interest ...
2025-06-21 22:55:09
Finance
Economy

Trump's Frustration: Will Powell Face Dismissal Over Interest Rates?

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President Donald Trump has expressed frustration over the Federal Reserve's decision to maintain current interest rates, arguing that it is costing the U.S. economy significantly. He hinted at the potential dismissal of Fed Chief Jerome Powell, blaming him for the financial strain.

Despite market expectations for interest rate cuts this year, Powell has adopted a cautious stance, citing inflation risks tied to ongoing trade wars. This split within the Federal Open Market Committee reflects broader uncertainty about monetary policy direction.

Some Fed officials believe rate cuts could happen sooner than anticipated, with Governor Christopher Waller suggesting a possible reduction in July. Critics, including Fannie Mae Chairman Bill Pulte, argue that high rates are hindering economic growth and the housing market.

As the Fed holds steady, the economic landscape remains precarious, prompting calls for immediate action to support financial stability and growth.

Related news on that topic:

Trump's Clash with Powell Over Interest Rates Raises Market ... Stability Concerns

US President Donald Trump has repeatedly expressed his dissatisfaction with Federal Reserve Chairman Jerome Powell's decision to maintain interest rates. Trump has been vocal about his desire for a significant reduction in rates, suggesting a cut to one or two percent. He argues that such a move could save the US government a trillion dollars annually. This conflict has led to Trump publicly criticizing Powell, labeling him with derogatory terms and questioning his competence. Despite these criticisms, Powell has maintained the Federal Reserve's stance, keeping interest rates between 4.25% and 4.5%. This decision aims to balance inflation and unemployment, taking into account the economic uncertainties exacerbated by trade tensions. Trump's threats to dismiss Powell have raised concerns among financial experts. They warn that such actions could undermine the central bank's independence, leading to volatility in financial markets. The legality of removing a Fed chair without cause is also debatable, adding a layer of complexity to the situation. The Federal Reserve's recent decisions indicate a cautious approach, with projections of rate cuts in the coming years. However, the internal division within the Federal Open Market Committee on future rate policies suggests varied opinions on the best path forward. The ongoing feud between Trump and Powell highlights the tension between political influence and economic policy-making. As the situation unfolds, the potential impact on market stability remains a key concern for both policymakers and investors.

Federal Reserve Stands Firm Amid Trump’s Tariff Push

The US Federal Reserve, led by Jerome Powell, remains steadfast against President Trump's push for lower interest rates, maintaining the key rate between 4.25 and 4.5 percent. Despite Trump's criticism and demands for rate cuts, the Fed's decision aligns with concerns over inflation and economic stability, exacerbated by the President’s tariff policies. These tariffs, targeting imported goods, have fueled inflation worries and impacted consumer prices and spending habits. Powell warns of the detrimental effects these tariffs may have on economic growth, highlighting their potential to weaken consumer demand and disrupt supply chains. With the global oil market unsettled and geopolitical tensions rising, the Fed's cautious stance aims to mitigate further economic disruption. The decision not to cut rates reflects the Fed's focus on maintaining economic equilibrium, despite political pressure. As companies adjust to the new trade landscape by raising prices and cutting staff, the Fed continues to prioritize inflation control over short-term political gains. This measured approach underscores the Fed's independence and commitment to long-term economic health amid a climate of uncertainty and political tension.

Read 5 more recent news on this topic

The press radar on this topic:

Tagesspiegel
21. Juni 2025 um 06:57

US President Wants Lower Interest Rate: Trump Again Contemplates Possible Dismissal of Fed Chief Powell

US President Donald Trump criticizes the decision of the US Federal Reserve not to lower interest rates. He ambiguously comments on the possible dismissal of Fed Chief Powell, claiming he is costing the US 'hundreds of billions of dollars'. The Federal Reserve has recently kept the key interest rate at 4.25-4.50 percent. Experts warn of uncertainty and disruptions in the financial markets if monetary policy decisions are made abruptly and politically motivated.
The Street
21. Juni 2025 um 13:05

Fed's Powell sent a blunt message on interest rates this week TheStreet Daily Newsletter

Federal Reserve Chairman Jerome Powell signaled that interest rates may remain steady until fall, citing uncertainty over the impact of tariffs on inflation. The Fed opted to keep rates at their current levels, expecting a rise in inflationary risk due to trade wars. Powell attributed the cautious approach to the central bank's dual mandate of keeping both inflation and unemployment low. Market watchers anticipate two rate cuts this year, but the FOMC's 'dot plot' shows a split among members on..
The Street
22. Juni 2025 um 11:55

Fed official sends shocking message on interest rate cuts TheStreet Daily Newsletter

A Federal Reserve official has indicated that interest rate cuts may come sooner than expected. Governor Christopher Waller stated that a rate cut could occur as early as July, contradicting earlier projections of a September meeting. This development comes after the Fed's decision to keep interest rates steady in June and despite concerns over tariff inflation.
The Street
23. Juni 2025 um 10:47

Fannie Mae chief Pulte sends savage one-word message to Fed's Powell TheStreet Daily Newsletter

Fed Chairman Jerome Powell faces criticism from Fannie Mae Chairman Bill Pulte, who accuses him of exacerbating the housing supply crisis with high interest rates. As Director of the Federal Housing Finance Agency, Pulte emphasizes that low mortgage rates are essential for supporting homebuyers and stimulating economic growth. Challenger, Gray, & Christmas reports a sharp increase in layoffs, while ISM data suggests a contracting economy. Powell's reluctance to cut rates amid inflation uncerta..
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