US President Donald Trump is calling for lower interest rates despite the Federal Reserve's expected pause on rate cuts. Trump criticized the Fed and its chair, Jerome Powell, while asserting his understanding of interest rates surpasses theirs. This potential clash with the Fed mirrors past tensions during Trump's first term.
Later this week, the US Federal Reserve Board chair, Jerome Powell, is likely to find himself in Donald Trump ’s crosshairs, yet again, with the Fed expected to keep US rates on hold while it waits to see the impact of Trump’s barrage of new policies.
“I think I know interest rates much better than they do, and I think I know it certainly better than the one who’s primarily in charge of making that decision,” Trump said last Thursday, in an obvious reference to Powell.“If I disagree , I will let it be known,” he said. He also said that he planned to speak to Powell “at the right time” and that the Fed would listen to him.
Within the blizzard of executive orders Trump issued on his first day in office last week was a declaration of an energy emergency in the US. The US produced a record 13.22 million barrels of oil a day last year and is expected to produce more than 13.5 million barrels a day this year. During the final year of Trump’s last term it produced 11.3 million barrels a day.
If food and energy prices are excluded from US inflation date to produce the “core” number that central banks tend to focus on, the US core inflation rate of 3.2 per cent at the end of last year was higher than the headline rate of 2.9 per cent – energy prices were detracting from inflation, not adding to it and lowering them further will do little to impact the other, more stubborn, influences on inflation.
FEDERAL RESERVE INTEREST RATES DONALD TRUMP ECONOMICS INFLATION
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