Former President Trump launched another attack on Fed Chairman Jerome Powell, branding him a “fool” on Truth Social while demanding immediate rate cuts. Trump claimed there’s “virtually NO INFLATION” – except there is. March numbers showed 2.4%, above the Fed’s 2% target. Powell kept rates steady at 4.25-4.50%, citing solid economic data. Trump’s administration piled on pressure too, with Treasury Secretary Bessent echoing calls for cuts. The story behind these numbers tells an interesting tale.
Former President Donald Trump launched a blistering attack on Federal Reserve Chairman Jerome Powell, calling him a “fool” after the central bank kept interest rates steady at its May meeting.
In a heated post on Truth Social, Trump claimed there was “virtually NO INFLATION” – despite March’s 2.4% inflation rate clearly showing otherwise.
Trump’s latest Truth Social rant ignores reality, dismissing 2.4% March inflation while insisting prices aren’t rising at all.
Gas prices have declined significantly year-over-year, with rates now down 10 percent.
The Fed’s decision maintained the benchmark federal funds rate at 4.25% to 4.50%, marking no change since their last cut in December 2024.
Powell isn’t exactly getting a break from the rest of Trump’s administration either.
Treasury Secretary Scott Bessent joined the chorus demanding rate cuts, while Elon Musk, now heading the Department of Government Efficiency, suggested scrutinizing the Fed’s spending habits.
Talk about a tough crowd.
The Fed’s holding pattern comes as officials assess the impact of Trump’s latest tariff policies, which have already prompted the Bank of England to cut its rates to 4.25%.
Powell, maintaining his trademark composure, cited relatively good U.S. economic data as justification for staying put.
Trump’s criticism isn’t just hot air – it’s causing real market turbulence.
His previous threats about firing Powell (before backing down) sent markets into temporary tailspins.
Now analysts warn that the Fed must walk a tightrope to avoid appearing influenced by political pressure.
Recent history shows that politically influenced central banks often face dangerous inflation spikes.
The timing is particularly delicate as the Fed navigates increased economic uncertainty.
With inflation still above the Fed’s 2% target and Trump’s tariffs creating global economic ripples, Powell and his team of 18 officials are stuck between a rock and a hard place.
Simple interest calculations help economists predict the impact of rate changes on government borrowing costs.
Despite Trump’s claims about “Tariff Money Pouring Into the U.S.,” the Fed noted that economic uncertainty has only increased.
Powell’s response? A gentle reminder that “Fed independence is very widely understood and supported in Washington.”
Apparently, someone forgot to cc Trump on that memo.
