President Donald Trump renewed his criticism of the Federal Reserve for holding off on interest rate cuts.
What Happened: On Tuesday, Trump once again called out the Federal Reserve for not cutting interest rates in an interview with ABC News, marking the 100th day milestone of his second term in office.
Showing more restraint than in past attacks on Fed Chair Jerome Powell, Trump pointed to his administration’s progress on inflation, citing lower grocery, egg, and gasoline prices, before adding that “interest rates are the same.”
Trump pointed out that gasoline prices were at $1.98 per gallon in some states, “It was $3.50 and $4.00 and $4.50. But gasoline is way down,” he says.
“Interest rates should be down,” Trump said, accusing the Federal Reserve of being “stubborn” and wanting “to be cute.” The remark echoed his 2018 criticism during his first term, when he told Fox & Friends the “Fed is getting a little too cute,” as reported by BBC News.
Why It Matters: Earlier in the day, speaking at a rally in Michigan to commemorate the 100th day of his second term, Trump told supporters he knows more about interest rates than Powell. “You’re supposed to let him do his own thing, but I know much more than he does about interest rates, believe me,” he said.
Several leading market voices expressed concerns regarding Trump’s criticism of Powell and plans for the latter’s ouster. Economist Nouriel Roubini referred to it as “a clumsy blame game,” and a “repeated own goal,” since it was unlikely to result in lower rates.
Despite these attacks, Fed Chair Powell hasn’t budged on the rate cuts, citing the current inflation rates at above 2%, which is higher than what the Fed has targeted.
The Fed’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) index, eased to just 2.3% year-over-year in March, down from February’s upwardly revised 2.7%.
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