Former President Donald Trump$TRUMP
is once again taking aim at Federal Reserve Chairman Jerome Powell, this time criticizing the Fed’s inaction following a disappointing U.S. jobs report. In a series of posts on Truth Social, Trump slammed Powell as “unbelievable!!!” and renewed his demand to “LOWER THE RATE,” claiming the Fed is falling behind while other global economies are moving more decisively.$ETH
Disappointing Jobs Report Triggers Renewed Criticism
Trump’s latest outburst came on the heels of a weak employment report from ADP, which showed private payrolls rose by just 37,000 in May—far below economists’ expectations of over 110,000. It marked the slowest growth since March 2023 and stoked fresh concerns on Wall Street ahead of the official Labor Department jobs report.
Seizing on the data, Trump argued that Powell’s reluctance to cut interest rates is harming the U.S. economy. He also pointed to the European Central Bank’s recent rate cuts—nine in total—as evidence that other nations are acting swiftly to boost growth. “We’re falling behind,” Trump warned, suggesting the U.S. is losing ground on the global economic stage.
A Growing Divide Between Trump and the Fed
The widening rift between Trump and the Federal Reserve highlights the broader tension between economic policy and political priorities. Trump recently met with Powell in person, reportedly urging him to lower rates. However, Powell has maintained that monetary policy decisions should be guided by data, not politics.
Despite growing calls for a rate cut, the Fed has held its benchmark interest rate steady at 4.25% to 4.5%, and it is not expected to change course at the upcoming policy meeting in June. Internally, the Fed appears split: while some officials support eventual cuts, others argue that inflation risks—especially those linked to Trump’s proposed tariffs—justify caution.
Central Banks Abroad Are Moving Faster
While the Fed takes a wait-and-see approach, central banks in other countries have been more aggressive. The European Central Bank has already implemented multiple rate cuts, and further easing is expected. Even the Swiss National Bank may follow suit amid signs of deflation.
Trump has cited these international moves to argue that the U.S. is lagging behind in responding to a cooling economy. He contends that Powell’s hesitation is putting American workers and businesses at a competitive disadvantage, and he’s using the moment to press his case for more accommodative monetary policy.
The Fed’s Dilemma: Data vs. Political Pressure
The Federal Reserve faces a difficult balancing act: support a slowing labor market or stay focused on fighting inflation. Powell has repeatedly emphasized the importance of sticking to a long-term, data-driven strategy, warning that short-term political pressure shouldn’t dictate the Fed’s course.
However, if job growth continues to falter and inflation remains manageable, pressure to act may become harder to ignore. Trump’s vocal criticism ensures that the Fed’s policy decisions will remain under intense public scrutiny.
Looking Ahead
The Fed’s next major decision is scheduled for June 17–18, with key labor and inflation data expected in the coming days. If the numbers disappoint again, Trump’s attacks on Powell are likely to escalate.
As the U.S. economy teeters between slowing job growth and inflation concerns—compounded by rising tariffs—the battle over interest rates is shaping up to be a central issue heading into the 2024 election. One thing is clear: the clash between Trump and Powell is far from over.