President Donald Trump Wednesday night criticized the Federal Reserve, urged the central bank to reduce interest rates, a few hours after he chose to leave unchanged loan interest rates.
This step marks the latest example of Trump which puts pressure on the federal reserve, although there is a long norm of political independence in the central bank.
Trump said the lower level would prepare the economy for the tariff that would increase over the next few weeks.
“The Fed will be far better than the cutting rate because the US rates begin to switch (convenience!) Their way is into the economy,” Trump said in a post about social truth on Wednesday, adding “doing the right thing.”
The president did not give further explanation but recently in January, Trump advised interest rates in response to what he called the prospect of lower oil prices.
Speaking in Washington, DC on Wednesday afternoon, Chairman of Fed Jerome Powell blamed Trump’s tariff for the “good part” of inflation recently, advocating for the waiting approach and saw because of changes in new administrative policies.
Even when the Fed left the main policy lever unchanged, the central bank estimated a weaker year -end economic growth and a higher inflation than in the December estimate.
The uncertainty of clouds of economic views, said Powell, refers to the Trump administration which has the potential to “significant policy changes” in fields such as trade, immigration and regulation.
“The uncertainty around changes and influences on high economic views,” Powell said. “We focus on the signaling signal from Noise.”
If the central bank raises interest rates as a means to protect against inflation induced by tariffs, Fed is at risk of holding loans and slowing down the economy, experts previously told ABC News.
On the other hand, experts say, if Fed decreases the level to stimulate the economy in dealing with potential slowdown, it threatens to increase expenditure and improve inflation.
Chairman of Federal Reserve Jerome Powell gave a statement at a press conference after a meeting of the Federal Open Market Committee at the Federal Reserve, March 19, 2025 in Washington.
Kevin Dietsch/Getty Image
The rare voltage of the central bank by Trump came a few weeks after the tariff touched the global trade war which made shares shaken and triggered concerns about the possibility of recession.
However, with a few main steps, the economy remains in solid conditions. This new job report shows a stable recruitment last month and a low historical unemployment rate. Inflation stood far below the peak achieved in 2022, although the price increase registered almost the percentage of points was higher than the Fed goal of 2%.
In January, Trump also made a call for lower rates, a few days before Fed chose to hold stable interest rates.
Speaking at a press conference in Washington, DC after the tariff announcement, Powell refused to comment on Trump’s call for lower interest rates, saying it would be “inappropriate” to respond.
“The public must be sure that we will continue to do our work as we always have,” Powell said, adding that Fed would continue to “use our tools to achieve our goals.”
After the tariff decision on Wednesday, a reporter again asked Powell whether Trump could interfere with The Fed. In a brief response, Powell confirmed previous comments.
“I think I did answer that question in this room some time ago,” Powell said. “And I have no desire to change the answer, and there is nothing new for you today.”