President Trump once again urged the Federal Reserve to lower interest rates as tariffs are implemented, stating on social media that the central bank would benefit from this move. The comments were made following the Fed’s decision to keep interest rates steady for the second consecutive meeting and maintain its forecast for two rate cuts later in the year. Fed Chair Jerome Powell cited increased inflation and decreased economic growth, attributing this to uncertainty surrounding the president’s plans for new tariffs. President Trump is set to unveil additional tariffs on April 2nd, which he has dubbed “Liberation Day.” In response, he called on the Fed to cut rates, emphasizing the importance of this decision as tariffs impact the economy. Powell acknowledged the potential inflationary effects of the tariffs, noting the uncertainty surrounding their impact on prices. Despite market turbulence and revised economic growth projections, the Fed’s stance on rate cuts remains unchanged. Powell maintained a cautious approach, acknowledging the uncertainty of the situation and the potential temporary nature of the price effects of tariffs. The impact of tariffs on prices is viewed as potentially transitory, echoing past debates on the subject. Trump’s administration has echoed similar sentiments, emphasizing that any price effects from tariffs will be temporary as the economy undergoes a period of transition.
In a recent development, President Trump has shifted his stance on Federal Reserve policies, opting to no longer criticize Chairman Powell as he did during his first term. Trump’s focus has turned towards reducing 10-year Treasury yields, with his aides emphasizing that he is no longer calling for rate cuts. Despite this shift, the White House recently issued an executive order to grant more control to Trump’s appointees over independent agencies, aiming for closer ties with the central bank. While the Fed retains authority over monetary policy, the order suggests a heightened connection to White House priorities. Powell confirmed that any attempt to remove him goes against the law, maintaining the Fed’s independence. For further insights on stock market developments and financial news, visit Yahoo Finance.
