Share and Follow
United States President Donald Trump has said he has “no intention of firing” Federal Reserve chair Jerome Powell, but wants interest rates to be lower.
“I would like to see him be a little more active in terms of his idea to lower interest rates,” Trump told reporters in the Oval Office on Tuesday.
, including a declaration last week that “if I want him out of there, he’ll be out real fast,” and a social media post branding Powell a “major loser”.
Trump repeatedly complained the Fed was not cutting interest rates quickly enough.
What does the Federal Reserve do?
The Federal Reserve is in charge of maximising and maintaining stable inflation.
The Federal Reserve has been holding off on further rate cuts as inflation has stayed stubbornly above the Fed’s target rate of 2 per cent per year.
In response to post-pandemic inflation, it raised interest rates to help cool down rising prices, later initiating a series of rate cuts as inflation eased and the US job market stayed strong.
How does Trump’s opinion of Powell affect the US stock market?
Trump’s clarification on Powell brought a measure of stability to financial markets, which had reacted with alarm to the prospect of political interference at the Fed.
The S&P 500 rose 2.5 per cent, and the Nasdaq climbed 2.7 per cent on Tuesday, lifted by Trump’s comments and growing optimism about a potential easing of tensions in the US-China trade war.
Trump has long argued the Fed should cut rates to stimulate growth and offset the impact of his tariffs, which have introduced inflationary pressures and disrupted international trade.
Powell, meanwhile, has warned against slashing rates too quickly, citing the need to maintain inflation expectations and preserve policy credibility.
For the latest from SBS News, and .
