Trump Slams Fed Chief Powell as ‘Numbskull’ in Urgent Call for Interest Rate Cuts

Jerome Powell, the head of the U.S. Federal Reserve, is under fire from former President Donald Trump. Trump called Powell a "numbskull" and urged him to lower interest rates. Trump claimed that a two-percentage point decrease could save the country $600 billion each year. He believes the Fed is too slow to react to economic conditions, especially since inflation appears to be low.

Recent reports show that U.S. producer prices only rose slightly in May, easing concerns about inflation due to tariffs. This has led Trump and his allies to push for a rate cut. Commerce Secretary Howard Lutnick chimed in, stressing that lower rates could significantly boost savings and that the economy is ready for such a move.

Vice President JD Vance labeled the Fed’s refusal to cut rates as "monetary malpractice" in a social media post. Despite their remarks, the markets haven’t reacted strongly. Traders think a rate cut is unlikely in the near future but see about a 76% chance of it happening by September.

Historically, the Fed’s decisions around interest rates are complex. In previous downturns, such as during the 2008 financial crisis, swift action on rates helped stabilize the economy. Many experts, like economists from the Brookings Institution, are watching closely; they suggest that raising rates when inflation is low can hinder growth.

Interestingly, while Trump has previously considered firing Powell, he has backed off after market instability. Powell maintains that he cannot be dismissed for political reasons, a claim backed by the Supreme Court’s view on Fed governors.

Overall, this tension highlights the ongoing debate between political leaders and economic experts on how to best manage the nation’s financial well-being. For further insights on the Federal Reserve and its impact on the economy, you can check out Brookings Institution’s analysis.

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