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Yahoo
a day ago
- Business
- Yahoo
Powell stands by 'wait and see' stance with Trump ramping up attacks on the Federal Reserve
WASHINGTON (AP) — Federal Reserve Chair Jerome Powell on Tuesday stuck to his position that the central bank will keep its key rate on hold while it waits to see how President Donald Trump's tariffs effect the economy, defying the steady stream of criticism from the White House, which wants lower borrowing costs. Powell, speaking in Sintra, Portugal, repeated his view that U.S. inflation is likely to pick up later this summer, though he acknowledged that the timing and magnitude of any price increase from the duties is uncertain. But he said the Fed will stay on hold while it evaluates how the economy evolves. 'As long as the economy is in solid shape, we think the prudent thing to do is to wait and see what those effects might be," Powell said, referring to the sweeping duties Trump has imposed this year. On Monday, Trump continued his attacks on Powell for not cutting the Fed's key rate, which Trump says would save U.S. taxpayers on interest costs on the federal government's debt. The president also extended his criticism to the entire Fed governing board, which participates on interest-rate decisions. 'The board just sits there and watches, so they are equally to blame,' Trump said. The attack on the board ratchets up pressure on individual Fed officials, such as Governor Chris Waller, who have been mentioned as potential successors to Powell, whose term ends in May 2026. The Fed has kept its key short-term interest rate unchanged this year, at about 4.3%, after cutting it three times in 2024. At a news conference in June, Powell suggested that the central bank would 'learn a great deal more over the summer' about whether President Donald Trump's sweeping tariffs would push up inflation or not. The comment suggested the Fed wouldn't consider cutting rates until its September meeting. Yet a few days later, Fed governors Waller and Michelle Bowman, who were both appointed by Trump, said that it was unlikely the tariffs would lead to persistent inflation. Both also indicated that they would likely support reducing the Fed's rate at its July 29-30 meeting. Sign in to access your portfolio
Associated Press
a day ago
- Business
- Associated Press
Powell stands by 'wait and see' stance with Trump ramping up attacks on the Federal Reserve
WASHINGTON (AP) — Federal Reserve Chair Jerome Powell on Tuesday stuck to his position that the central bank will keep its key rate on hold while it waits to see how President Donald Trump's tariffs effect the economy, defying the steady stream of criticism from the White House, which wants lower borrowing costs. Powell, speaking in Sintra, Portugal, repeated his view that U.S. inflation is likely to pick up later this summer, though he acknowledged that the timing and magnitude of any price increase from the duties is uncertain. But he said the Fed will stay on hold while it evaluates how the economy evolves. 'As long as the economy is in solid shape, we think the prudent thing to do is to wait and see what those effects might be,' Powell said, referring to the sweeping duties Trump has imposed this year. On Monday, Trump continued his attacks on Powell for not cutting the Fed's key rate, which Trump says would save U.S. taxpayers on interest costs on the federal government's debt. The president also extended his criticism to the entire Fed governing board, which participates on interest-rate decisions. 'The board just sits there and watches, so they are equally to blame,' Trump said. The attack on the board ratchets up pressure on individual Fed officials, such as Governor Chris Waller, who have been mentioned as potential successors to Powell, whose term ends in May 2026. The Fed has kept its key short-term interest rate unchanged this year, at about 4.3%, after cutting it three times in 2024. At a news conference in June, Powell suggested that the central bank would 'learn a great deal more over the summer' about whether President Donald Trump's sweeping tariffs would push up inflation or not. The comment suggested the Fed wouldn't consider cutting rates until its September meeting. Yet a few days later, Fed governors Waller and Michelle Bowman, who were both appointed by Trump, said that it was unlikely the tariffs would lead to persistent inflation. Both also indicated that they would likely support reducing the Fed's rate at its July 29-30 meeting.
Economic Times
2 days ago
- Business
- Economic Times
Trump demands 1% interest rates, blasts Fed chair Jerome 'Too Late' Powell for ‘costing trillions'
Donald Trump with Federal Reserve Chair Jerome Powell Synopsis Donald Trump has strongly criticized Federal Reserve Chairman Jerome Powell and the Fed Board, accusing them of mismanagement and costing the U.S. trillions in interest. Trump believes the Fed's inaction and high interest rates are detrimental to the country's financial health. He suggests rates should be much lower and blames the board for failing in their duties. U.S. President Donald Trump launched a sharp attack on Federal Reserve Chairman Jerome Powell and the Fed Board in a Truth Social post on Monday, accusing them of failing in their duties and causing the country to lose "trillions of dollars in interest cost." ADVERTISEMENT Trump claimed that if the Fed were 'doing their job properly,' the country would be saving trillions in interest costs, suggesting that interest rates should be as low as 1% or better. 'The Board just sits there and watches, so they are equally to blame,' Trump added, in a post that underscores his long-standing frustration with Powell, whom he appointed in 2018. Trump referred to Powell as 'Jerome 'Too Late' Powell', criticizing the central bank for what he called inaction and mismanagement of interest rates.'Jerome 'Too Late' Powell, and his entire Board, should be ashamed of themselves for allowing this to happen to the United States,' Trump wrote. 'They have one of the easiest, yet most prestigious, jobs in America, and they have FAILED — And continue to do so.' Trump's comments come amid ongoing discussions within the Federal Reserve about when and how quickly to cut interest rates amid signs of cooling inflation and global economic uncertainty. (You can now subscribe to our Economic Times WhatsApp channel) (Catch all the US News, UK News, Canada News, International Breaking News Events, and Latest News Updates on The Economic Times.) Download The Economic Times News App to get Daily International News Updates. NEXT STORY
Yahoo
2 days ago
- Business
- Yahoo
Trump sends handwritten letter to Powell demanding ultra-low interest rates
President Donald Trump on Monday continued his extended attack against Federal Reserve Chair Jerome Powell and the central bank's Board of Governors, calling for ultra-low rates in an intensifying campaign demanding interest rate cuts. Trump on his social media platform wrote that the Fed's board 'should be ashamed of themselves for allowing this to happen to the United States.' However, officials who sit on the Fed's board aren't the only ones who vote on policy moves; that also includes five other regional Fed bank presidents. It's unclear if Trump meant to attack just the board or all of the Fed officials with voting power. He posted a chart ranking many of the world's central banks by the level of their key interest rate, claiming the US has one of the highest. The chart included a note in Trump's handwriting that criticized Powell directly, saying the Fed chair has 'cost the USA a fortune' and that he continues 'to do so.' White House press secretary Karoline Leavitt said in a news conference Monday that Trump sent the chart to the Fed. 'The Board just sits there and watches, so they are equally to blame. We should be paying 1% Interest, or better!' Trump said in his social media post. For months, Trump has relentlessly slammed Powell, describing him as a 'fool,' a 'numbskull' and a 'stupid person.' Trump's disdain for Powell, whom he himself appointed in 2018, stretches back to his first term as president — all centered around the Fed not lowering borrowing costs to Trump's liking. Trump has said the federal government is stuck paying massive interest rate payments on its debt because the Fed hasn't lowered rates. Leavitt said that 'American people want to borrow money cheaply, and they should be able to do that, but unfortunately, we have interest rates that are still too high.' While some central banks, such as the European Central Bank and the Bank of Mexico, have lowered their benchmark lending rate a few times this year, the Fed has not. One big reason for that is the major policy shifts since Trump took office. Officials have said they want to see how those changes affect the economy first before considering further rate cuts. Powell for his part has avoided responding to Trump's harsh criticism, noting that the Fed is only focused on successfully taming inflation and preserving the labor market's health. Central bankers don't consider the government's finances when determining policy moves. The Fed leader told Senate lawmakers during a June 24 hearing that 'we don't take into consideration political factors' when setting rates. When Powell delivered his semiannual monetary policy report to Congress earlier this month, he was praised by some lawmakers for refusing to delve into politics by avoiding any response to Trump's attacks. Powell's apolitical, data-driven approach has been praised by other central bankers around the world, too. After delivering welcoming remarks for a central banking conference in Sintra, Portugal, ECB President Christine Lagarde on Monday called for an applause for Powell because he 'epitomizes the standard of a courageous central banker.' Powell is expected to participate in a moderated discussion on Tuesday at the conference. Powell's term as chair ends in May 2026, but Trump has said he will announce his pick for the next Fed leader imminently. Presidents typically wait until the final few months of the incumbent Fed chair's term to announce their nominee, so if Trump proceeds with naming his pick as early as this summer, it would be an unprecedented development in the Fed's 111-year history. Whomever Trump names would effectively be acting as America's 'shadow' Fed chair. And if this person proceeds to challenge the views of the current Fed chief, that could confuse financial markets, weaken the dollar and push up long-term interest rates, according to experts. There are already a handful of contenders for the top job at the Fed: Treasury Secretary Scott Bessent; Kevin Warsh, a former Fed governor; Christopher Waller, a current Fed governor; Kevin Hassett, the director of the White House's National Economic Council; and David Malpass, whom Trump in his first term nominated to helm the World Bank. In a Fox Business interview that aired Sunday, Trump said 'we're going to get somebody into the Fed who's going to be able to lower (interest rates.)' When asked on his thoughts about Warsh as Fed chair, Trump said: 'Kevin is very talented, but I don't know if it's going to be him. But he's a very talented guy.' 'He wouldn't be doing what Powell is,' Trump said. CNN's Elisabeth Buchwald contributed to this report. Sign in to access your portfolio
Yahoo
5 days ago
- Business
- Yahoo
Bessent Plays Down Speculation of Any Early Trump Fed Chair Pick
(Bloomberg) -- Treasury Secretary Scott Bessent played down speculation that President Donald Trump may consider an early move to nominate a successor to Federal Reserve Chair Jerome Powell, pointing to one potential timeline that could see a name emerge in October or November. Philadelphia Transit System Votes to Cut Service by 45%, Hike Fares US Renters Face Storm of Rising Costs Squeezed by Crowds, the Roads of Central Park Are Being Reimagined Mapping the Architectural History of New York's Chinatown Sprawl Is Still Not the Answer 'I don't think anyone is necessarily talking about that,' Bessent said when asked in a CNBC interview Friday about the potential for Trump to name a so-called shadow Fed chair. Bessent pointed out that there are two scheduled openings on the Fed board early next year: Adriana Kugler's term is up in January, and Powell's term as the chair concludes in May. Powell has a separate term as a board member, and that stretches to 2028. Powell himself declined to say earlier this month whether he would consider remaining on the board once his chairmanship concluded. 'So, Chair Powell doesn't have to leave — he could stay on the board, not as chair,' Bessent noted. If that happened, and Trump opted not to choose any existing board member as chair, the administration would need to use Kugler's slot for the chairmanship, a scenario that Bessent referenced. 'So there is a chance that the person who is going to become the chair could be appointed in January, which would probably mean an October, November nomination,' Bessent said. The Treasury chief also noted that Trump is 'obviously worried that the Fed is behind the curve again' in failing to resume interest-rate cuts this year despite inflation being 'way down.' Asked about his own potential candidacy to become Fed chair, Bessent said, 'Look, I'll do what the president wants, but I think I have the best job in Washington.' America's Top Consumer-Sentiment Economist Is Worried How to Steal a House Inside Gap's Last-Ditch, Tariff-Addled Turnaround Push Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Apple Test-Drives Big-Screen Movie Strategy With F1 ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
