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Trump criticizes the Fed after interest rates remain unchanged
Former U.S. President Donald Trump intensified his criticism of the Federal Reserve, accusing Chairman Jerome Powell of mismanaging the economy and failing to control inflation. His comments followed the Fed’s decision to keep interest rates unchanged at 4.25% to 4.5% after a series of rate cuts last year. Powell stated that the bank was not in a hurry to implement further cuts due to economic uncertainty. Trump has advocated for tariffs, mass deportations, and tax cuts as part of his economic plans, though some economists warn these policies could temporarily increase prices. Powell acknowledged concerns within the Fed about their potential impact but said officials were taking a wait-and-see approach. Meanwhile, Howard Lutnick, Trump’s nominee for Commerce Secretary, defended the tariff plans, dismissing worries about rising costs.
Trump Criticizes Federal Reserve Amid Calls for Rate Cuts
US President Donald Trump intensified his criticism of the Federal Reserve and its chairman, Jerome Powell, just hours after publicly urging the central bank to lower interest rates. In a social media post, Trump accused the Fed of failing to address the inflation problem it had allegedly created and mismanaging the economy. This criticism comes as the Fed held its January meeting and decided to leave the key interest rate unchanged at a range of 4.25% to 4.5%, following a series of rate cuts late last year.
Fed’s Cautious Approach
During the meeting, Powell emphasized that the Fed is not in a hurry to make further rate cuts, citing the high level of economic uncertainty. He stated, “The committee is very much in the mode of waiting to see what will happen,” indicating a cautious approach to future monetary policy decisions. Powell also acknowledged concerns among Fed officials that some of Trump’s proposed policies—such as widespread tariffs, mass deportations of illegal immigrants, and significant tax and regulatory cuts—could temporarily drive up prices, as some economists have warned.
Trump’s Economic Promises
Trump has made bold promises to drastically alter the US economy, including imposing tariffs, reducing taxes, and cutting regulations. These policies are central to his economic agenda, but they have sparked debate about their potential impact on inflation and economic stability. During his nomination hearing on Thursday, Howard Lutnick, Trump’s pick to lead the Commerce Department, defended the tariff plans and downplayed concerns about their effect on prices. However, Powell and other Fed officials remain uncertain about how these policies will play out in practice.
Ongoing Tensions
The tension between Trump and the Federal Reserve highlights the challenges of balancing economic growth with inflation control. While Trump has repeatedly called for lower interest rates to stimulate the economy, the Fed has maintained a cautious stance, prioritizing long-term stability over short-term gains. This disagreement underscores the broader debate about the role of monetary policy in shaping the US economy.
Looking Ahead
As the Fed continues to monitor economic indicators, its decisions will be closely watched by policymakers, investors, and the public. The outcome of Trump’s proposed economic policies and their impact on inflation and growth will likely play a significant role in shaping the Fed’s future actions. For now, the central bank remains in a holding pattern, waiting to see how the economic landscape evolves.
Source: Federal Reserve Meeting and Public Statements
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