WASHINGTON (Reuters) -U.S. President Donald Trump renewed his criticism on Thursday of Federal Reserve Chair Jerome Powell, complaining the Fed is refusing to lower interest rates.
Trump said cutting interest rates would be “like jet fuel” for the economy “but he doesn’t want to do it.” He said Powell is “not in love with me.”
The Fed this week kept short-term borrowing costs in the 4.25%-4.50% range, where they have been since December. While big tariffs are likely to increase both inflation and unemployment, the economy so far has shown little sign of either, Powell said on Wednesday, giving the central bank time to wait and see until there is more clarity on where tariffs actually end up, and how that affects prices and jobs. At that point the Fed can act as needed, and potentially aggressively, he said.
Cutting rates typically boosts the economy, but in a time of above-target inflation, could also unleash an upward spiral of price pressures that Powell has said must be avoided.
Trump has made no secret of his dissatisfaction with Powell’s conduct of monetary policy, at times suggesting he would like him gone, rhetoric that sent stocks and bonds both down as investors priced in the chance the Fed could lose its independence and thereby its ability to restrain inflation.
Powell, asked about Trump’s criticisms in his news conference on Wednesday, declined to comment. He has said he intends to complete his term as chair, which ends in about a year.
(Reporting by Andrea Shalal and Steve Holland; Editing by Mark Porter and Chris Reese)
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