Trump calls for rate cuts, criticizes Powell for 'possibly messing up again'
U.S. President Trump posted on his social platform 'Truth Social', urging the Federal Reserve to cut interest rates as soon as possible. He pointed out that 'almost everyone's consensus is that the Federal Reserve should cut rates sooner rather than later.' 'Always late Powell' - this person, known for his slow actions, may mess everything up again, who knows?' Trump's remarks have once again sparked widespread attention in the market regarding the Federal Reserve's monetary policy.
Background and market expectations for the Federal Reserve's interest rate cuts
Trump's call is not without context. Recently, the U.S. economy is facing many uncertainties, including disruptions in trade policy and concerns about an economic recession. Although the Federal Reserve decided to maintain the interest rate in the range of 4.25% to 4.50% at its meeting on May 7, the market generally expects the Fed to cut rates in September. Furthermore, Powell mentioned 'waiting' several times at the post-meeting press conference, emphasizing that the Fed needs more time to assess the economic situation.
Divergence between Trump and the Federal Reserve
Trump has been critical of the Federal Reserve's monetary policy, believing that the Fed's interest rate hikes and slow rate cuts have negatively impacted the U.S. economy. He has stated on multiple occasions that if he wins this year's election, he will not reappoint Powell as Federal Reserve Chairman. Additionally, Trump criticized Walmart for blaming price increases on tariff policies, arguing that Walmart should absorb the tariff costs on its own.
The Federal Reserve's response and market reaction
Despite Trump's repeated pressure, the Federal Reserve emphasizes the independence of its monetary policy. Powell stated at a recent press conference that the Fed needs to ensure that a one-time spike in prices does not turn into a persistent inflation issue, and therefore will not rush to take action on rate cuts. However, the market does not buy the Fed's wait-and-see attitude, as investors generally believe that the Fed's pace of rate cuts is too slow.
Future Outlook
Trump's call and criticism of Powell reflect his concerns about the current economic situation and dissatisfaction with the Federal Reserve's policies. Although the Fed emphasizes its independence, market expectations for interest rate cuts remain strong. In the coming weeks, several key Federal Reserve officials will speak, and the market will closely watch their statements.
In summary, the divergence between Trump and the Federal Reserve not only reflects the different perspectives of policymakers and politicians but also reveals the complex challenges facing the current U.S. economy.
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