President Trump on Wednesday said the Federal Reserve had “failed to stop the problem they created with inflation” and had done a “terrible job on bank regulation” in a post on Truth Social.
His rebuke came hours after the Fed held interest rates steady and gave little insight into when further reductions in borrowing costs may take place.
Trump accused the central bankers and Powell of allowing inflation to skyrocket to a four-decade high in the aftermath of the COVID-19 pandemic.
“Because Jay Powell and the Fed failed to stop the problem they created with Inflation, I will do it by unleashing American Energy production, slashing Regulation, rebalancing International Trade, and reigniting American Manufacturing, but I will do much more than stopping Inflation, I will make our Country financially, and otherwise, powerful again!” Trump wrote on Truth Social.
“If the Fed had spent less time on DEI, gender ideology, ‘green’ energy, and fake climate change, Inflation would never have been a problem. Instead, we suffered from the worst Inflation in the History of our Country!”
Powell — speaking at a press conference following the unanimous decision to keep the overnight interest rate in the current 4.25%-4.50% range — said, “we do not need to be in a hurry to adjust our policy stance” and monetary policy is “well positioned” for the challenges at hand.
Powell declined to comment on Trump’s demand last week for an immediate cut, saying the Fed will be “really keeping our heads down and doing our work and that’s how we best serve the public.”
When asked whether the president told Powell his demand directly, he replied: “I’ve had no contact.”
Powell noted there are risks to cutting rates too aggressively, saying “we know that reducing policy restraint too fast or too much could hinder progress on inflation.”
Emerging from their first policy meeting during Trump’s second term in the White House, Powell said central bank officials are “waiting to see what policies are enacted” before judging their effects on inflation, employment and overall economic activity, and they are in no hurry to adjust rates further.
Trump returned to power last week with promises of import tariffs, an immigration crackdown, tax cuts and looser regulation.
After the Fed lowered rates three times in the latter part of last year, inflation has largely moved sideways in recent months, and the central bank dropped from its latest policy statement language saying that inflation “has made progress” towards its 2% inflation goal, noting only that the pace of price increases “remains elevated.”
Recent key inflation readings remain about half a percentage point or more above the Fed’s target.
Fed officials say they largely believe the progress in lowering inflation will resume this year, but have now put rates on hold as they await data to confirm it.
“Economic activity has continued to expand at a solid pace. The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid,” the central bank’s policy-setting Federal Open Market Committee said in its latest policy statement.
“In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks,” it said.
With Post wires
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