After the Fed kept interest rates unchanged, President Donald Trump continued to mock Chairman Jerome Powell and said that the US has almost no inflation.
"'Slow' Jerome Powell is a fool, knows nothing. Other than that, I really like him," the US President wrote on the social network Truth Social on May 8. He also affirmed that oil and energy prices are falling sharply, and almost all costs (including food and eggs) are going down.
"The US has almost no inflation. Tax money is pouring in here, too," the US President declared.
Previously, after a two-day policy meeting, the US Federal Reserve (Fed) announced on May 7 that it would keep the reference interest rate unchanged at 4.25-4.50%. This level has been maintained since the end of last year.
This decision made Mr. Trump unhappy. In the past few months, he has continuously called on the Fed to lower interest rates. Analysts believe that President Trump wants to cut interest rates to minimize the impact of import tariffs. However, Fed Chairman Jerome Powell does not want to do this early, due to concerns about inflation.
In the announcement on May 7, the Fed said that the agency would not change interest rates until the economic outlook became clearer. They also warned that "the risks of unemployment and inflation are both rising".
At the press conference later, the Fed Chairman also mentioned Mr. Trump's recent criticism. He affirmed that this "absolutely does not affect the Fed's work". "We have always used policy tools to promote full employment and price stability, in the interests of the American people. We only consider the economic data, the outlook, and the risks," Powell said.
Last month, White House economic adviser Kevin Hassett said the Trump administration was considering legal options to fire Powell. This raised concerns in markets that the Fed would no longer be able to operate independently. The US stock market, the US dollar, and US government bond prices all fell. On April 22, the situation cooled down when Trump affirmed that he had no intention of firing Powell.
In an interview with NBC last weekend, Mr. Trump also reaffirmed that he would not fire Powell. "No, why would I do that? I will be replacing him in a short time," Trump said. Powell's term as Chairman will end in May 2026.
(according to Reuters, CNBC)