US President Donald Trump has cautioned that the US economy may face sluggish growth if Federal Reserve Chair Jerome Powell does not promptly reduce interest rates.
This warning is particularly important given the potential effects a slowdown in the US economy could have on the cryptocurrency market.
Donald Trump Issues Warning Regarding Jerome Powell's Rate Decisions
In a post on Truth Social, Donald Trump expressed concerns about a potential "slowing of the economy" if Federal Reserve Chair Jerome Powell does not reduce interest rates.
He emphasized that with costs decreasing, the likelihood of inflation is minimal; however, a recession could be imminent if Powell and his team do not take action.
This statement represents Trump's latest appeal to Powell for a reduction in interest rates.
He pointed out that the European Union has already implemented seven rate cuts, while the Federal Reserve has yet to respond similarly.
Notably, Trump accused Powell of having lowered rates last year to assist Joe Biden and Kamala Harris in their electoral campaign, despite the outcome not favoring them.
Although Trump continues to press for a rate cut, Powell has indicated no intention of lowering interest rates at this time.
In a recent address, Powell cautioned that Trump's tariffs might contribute to increased inflation in the U.S., which he suggested is a reason the Federal Open Market Committee is hesitant to adjust its monetary policy.
As Powell maintains his stance on interest rates, speculation arises that Trump might consider dismissing the Fed Chair. However, traders believe such an action is unlikely to occur this year.
Market analyst Anthony Pompliano advised Trump against terminating Powell, while Senator Elizabeth Warren warned that such a move could trigger a stock market crash.
There is also concern that a decline in the stock market could adversely affect the cryptocurrency market as well.
Experts Anticipate Rate Reductions Despite Powell's Reluctance
Although Jerome Powell has shown reluctance to respond to Donald Trump's requests for lower interest rates, analysts continue to forecast multiple rate cuts by the Federal Reserve this year.
Citigroup projects that the Fed will implement an interest rate reduction in June, estimating a cumulative decrease of 125 basis points (bps) throughout the year.
Similarly, Bank of America has recently forecasted four interest rate cuts for this year, with the initial reduction expected during the May FOMC meeting, followed by additional cuts in July, September, and December.
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