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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.
Following his public calls for the US central bank to lower interest rates, US President Donald Trump redoubled his attacks on the institution just hours later. In a social media post, he claimed that the Federal Reserve and its chairman, Jerome Powell, had "failed to stop the problem they created with inflation" and had mismanaged the economy. In a pause following a series of rate cuts late last year, the Fed held its January meeting Wednesday and left the key interest rate unchanged, ranging from 4.25% to 4.5%. Given the high level of uncertainty surrounding the potential direction of the economy, Powell stated that the bank was not "in a hurry" to make any more cuts. Trump has called for widespread tariffs, the mass deportation of illegal immigrants, and significant tax and regulatory cuts as part of his promises to drastically alter the US economy.
According to Powell, some bank employees were also concerned that some of those policies might, at least temporarily, drive up prices, as some economists have cautioned. During his nomination hearing on Thursday, Howard Lutnick, Trump's choice to head the Commerce Department, defended tariff plans and downplayed worries about how they would affect prices. Powell, however, stated that officials were still unsure of how those plans would work out. He said, "The committee is very much in the mode of waiting to see what will happen," during a press conference about the interest rate decision.
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