As the US Fed is expected to keep benchmark interest rates unchanged, the US President intensified his long-standing criticism of Federal Reserve Chairman Jerome Powell.
Speaking outside the White House on Wednesday, Donald Trump called Powell “stupid” and expressed strong doubt that the Fed would cut interest rates at the meeting, despite his repeated calls for easing monetary policy.
“So we have a stupid person. Frankly, you probably won’t cut today,” the US President said.
“Europe had 10 cuts, and we had none. And I guess he’s a political guy, I don’t know. He’s a political guy who’s not a smart person, but he’s costing the country a fortune,” he added.
This is not the first time Trump has made his displeasure public.
Since his return to the White House in January, the US President has repeatedly expressed his dissatisfaction with Federal Reserve Chair Jerome Powell’s approach to monetary policy.
US Fed refusal to cut rates is costing Americans: Donald Trump
Donald Trump argued that this rate should be lowered by at least two percentage points to ease what he perceives as unnecessarily high borrowing costs.
He claimed that higher interest rates are costing the US “hundreds of billions” in financing expenses that could be saved if the Fed were to reduce rates.
While doubling down on his criticism of the US Fed chief, the US President said that he doesn’t think Powell is a “smart person.”
“But now we have a man that just refuses to lower the Fed rate, just refuses to do so and he’s not a smart person. I don’t even think he’s that political. I think he hates me, but that’s OK,” the president said.
Donald Trump rejected the expectations around the possible rise in inflation.
“If he’s worried about inflation, that’s OK. I understand that. I don’t think there’s going to be any. So far there hasn’t,” Trump said.
Concerns about Donald Trump’s interference
Calling the US Fed chief “stupid” is not new, at least for the US President as in the past, Trump called Powell a “numbskull” and claimed that he is threatening to “force something” regarding interest rates.
The face-off has raised concerns about the independence of the central bank amid heightened uncertainties due to multiple wars in the world.
Powell’s term as Fed chair is set to expire in May 2026, and Trump has indicated he plans to name a successor soon.
Fed cautious around inflation risks
The Fed’s choice to hold interest rates steady till now highlights its commitment to balancing inflation control with supporting economic growth, especially in a period marked by considerable uncertainty.
Although some recent inflation reports have been milder than anticipated, policymakers remain cautious, as there are signs that price pressures from tariffs and other factors could start to push inflation higher later in the summer.
Investors are already reacting to the developments as Dow Jones and other indices opened flat on Wednesday.
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