U.S. President Donald Trump criticized Fed Chairman Jerome Powell and called for his dismissal over the slow reduction of the key rate.
The head of state published a comment the day after Powell confirmed the central bank's wait-and-see and cautious policy. He referred to the 'massive tariffs' introduced by Trump, the sizes of which turned out to be 'larger than expected.'
The head of the regulator noted that official data on economic growth will be known in two weeks, but current information indicates a slowdown. According to him, this potentially puts the Fed in a situation of battling stagflation that has been 'forgotten for decades.'
In a similar vein, ahead of Powell's speech at The Economic Club of Chicago, New York Fed President John Williams expressed that he expects real GDP to slow down due to economic uncertainty compared to last year's figures.
"With such a decline in growth rates, I expect unemployment to rise from the current level of 4.2% to 4.5–5% next year. I believe that the increase in tariffs will push annual inflation to values between 3.5% and 4%," Williams added.
The target value of the price growth index, which the Fed uses to determine the pace of rate cuts, is 2%.
Trump stated that the U.S. central bank is lagging behind its European counterparts. On April 17, the ECB announced its seventh consecutive cut in key interest rates. The rates will be reduced by 25 basis points starting April 23 — to 2.25%, 2.4%, and 2.65%, respectively.
The Fed maintained the unchanged rate range of 4.25-4.5% at its March meeting.
"Oil and food prices (even eggs!) are falling, while the U.S. is getting richer from tariffs. The [Fed] should have cut rates long ago, like the ECB, and must certainly do so now. Powell's dismissal cannot happen so quickly!" Trump wrote.
On the Polymarket forecasting platform, the chances of a Fed rate cut in June fell from 84% at the beginning of April to 54%.
Experts believe that the easing of monetary policy by the central bank could be a potential driver for the growth of risky assets like Bitcoin.