In the current political and economic context, President Donald Trump has publicly outlined his plan to choose a new chair for the Federal Reserve, someone who will agree with the interest rate cut policy. Speaking at the NATO conference in The Hague, Trump emphasized the importance of reforming financial policy to promote economic growth. This information not only attracts investors' attention but also raises significant questions about the future of the current Fed leader, Jerome Powell.
Trump and the interest rate reform plan at the Fed
President Trump has repeatedly criticized Jerome Powell, claiming that the Fed should lower interest rates. However, Powell has expressed a cautious stance on adjusting interest rate policy, leading to tensions between the two sides. This raises questions about the Fed's ability to maintain its policy in the coming months.
Trump stated that he would choose someone who fully supports interest rate cuts, asserting that there are already 'three or four' potential candidates. This indicates that he has no intention of waiting until Powell's term ends in May 2026.
This information is even more significant as Trump emphasizes his desire to cut interest rates by up to 2.5 percentage points, a figure much higher than the Fed's predictions. This poses many challenges in managing macroeconomic financial policy.
Speculation surrounding Powell's successor
Sources from the press indicate that Trump may announce his choice soon. Some names being discussed include Scott Bessent, the Secretary of the Treasury, alongside Kevin Warsh, a former Fed member who is highly regarded by Trump.
In the context of tensions, the emergence of differing opinions on the Fed's interest rate policy has increased attention from investors and economists. Speculation about the successor has not ceased, and the possibility of a new chair relatively soon is attracting significant interest.
Criticisms from Trump directed at Jerome Powell
Trump has continuously criticized Powell's decisions, claiming that his cautious approach harms the economy. The President's statements have occurred very frequently on social media, where he has called Powell 'too slow' in making important decisions regarding interest rates.
The conflict between Trump and Powell not only stopped at public statements but was also evident in policy decisions. Powell's slow approach clashes with the President's urgent desire to boost the economy through more flexible financial policies.
If there is no consensus between the two sides, the future of the U.S. economy could be severely affected, especially as trade agreements quietly await implementation.
Tensions in the context of trade and interest rate policy
While the female President continues to adjust her tariff policies, he is also trying to finalize trade agreements before the July 9 deadline. This could have a significant impact on interest rates and financial policy in the near future.
Powell has emphasized that the Fed needs to consider the impacts of trade policies before making decisions about interest rates. However, Trump needs faster decisions with fewer reasons to implement his financial plans.
Maintaining stability in the U.S. central bank will be crucial if the U.S. wants to maintain its leading position on the international stage amid increasingly fierce global competition.
The importance of interest rate policy for the economy
The Fed's interest rate policy has far-reaching effects on the U.S. and global economy. Lowering interest rates may help stimulate spending and investment, thereby fostering economic growth. However, this also requires careful consideration to avoid increasing inflation.
President Trump is clearly looking to expedite this process, but pursuing an excessively low interest rate policy for an extended period could lead to unwanted risks. The Fed needs to act responsibly to maintain a balance between growth and financial stability.
In the rapidly changing context of the global economy, maintaining a reasonable interest rate policy will be a significant challenge for policymakers, but it also presents an opportunity to affirm the United States' position on the world economic map.
Source: https://tintucbitcoin.com/trump-supports-powell-fed-chair/
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