Trump urges Congress to grill ‘dumb, hardheaded’ Powell in latest attack over Fed’s refusal to cut interest rates

The President of the Federal Reserve will appear before congress today and tomorrow, first in front of the Financial Services Committee in the House of Representatives on Tuesday morning and again before the Senate Banking Committee on Wednesday morning.

Powell will be given the opportunity to justify the reason for his rejection and other members of the Federal Open Market Committee (FOMC) so far in 2025 refusing to reduce the basic rate of his current level from 4.25 to 4.5 %.

FOMC was consistent in his region, as well as running out of political discourse, but he still faces criticism from economists who say his narrow critical stance is relatively unjustified.

Trump urged politicians at the two meetings this week to pushing Powell strongly because of not reducing the basis price – and giving the president his desire.

Writing on the social truth several hours ago, Trump said: “I hope that Congress will really work this very stupid person who heads him. We will pay for his incompetence for many years to come.”

He added that Trump’s justification for payment to reduce the rate is partially dependent on the fact that other central banks around the world began to reduce their own policy, as he added: “Europe had 10 discounts, we had no inflation, any large economy – we must be less than two points to three points.

“It would provide the United States of America $ 800 billion annually, in addition. What is the difference that this will happen. If things change later to negativity, then increase the rate.”

This payment to reduce rates is the opposite of Trump’s demand for the campaign trail last year. While running for the presidency, Trump claimed that Powell was playing politics and would hand over the Biden camp as an economic blessing if he was cut off.

Once he won the Oval Office, Trump changed ingenuity and began to ask Powell to reduce – he was asking the economy stable enough to maintain a lower rate and increase economic activity.

It can be said that this shows the reason for the federal delegation of the central bank as independent, so that a major lever can be used for the long -term benefit for companies and consumers instead of the whims of the Oval Office.

Powell and FOMC were clear about the reason they did not want to reduce, noting the factors that might put their double side – employment on the maximum and inflation by 2 % – in the conflict.

The keynote speech from the past few meetings was “clarity” – Retvis, FOMC members want to wait for more concrete data before starting to draw a path towards more normal interest rates.

While the role of FOMC is not the commentary on politics, it has pointed to political factors such as inflationary pressures for definitions and political policy.

Although markets may prefer to reduce, what frightens analysts and investors alike is when Trump’s pressure on the basic rate to the tampering questions.

When Trump threatened to dismiss Powell earlier this year, for example, the market reaction was negatively with investors who warned investors not to expect a “severe” asset prices if the president went further in directing and independent the Federal Reserve Bank.

Trump soon retreated, saying that Powell – who was appointed for the first time by the president in his first term – would sit his term due to the end in 2026.

It’s time to change

While Trump’s claim that FOMC’s rejection of the basic rate has cost the economy $ 800 billion without explanation, some economists are widely believed that Powell should not be based on current decisions regarding potential inflationary factors on the line.

For example, the Oval Office has changed its position on the customs tariff several times, whether by stopping for 90 days or agreements with some countries, or threats of long -distance walking on the likes of the European Union.

But experts point out that the most end of these threats are not yet achieved, and that both inflation data and employment data have been somewhat constant during the past few months.

Jeremy Sigil, a professor of honorary financing at Warton College at the University of Pennsylvania, writes, for example, “Treating the price level of taxes does not justify that there is a tax on input, does not justify any of the rates, as it does not justify the sales tax by approximately 10 %. 3.5 % – to match the real neutral rate of the economy.”

Siegel adds that writing in favor of Wisdomtree, where he was a great expert in the economy, added that the ruler of the Federal Reserve, Chris Walir, has argued in a possible July rate reduction, adding: “Is it a test to be a Powell alternative?