The Wall Street Journal editorial board has the back of Jerome Powell this week, following President Trump’s fierce social media criticism after Trump provided negative economic forecasts for Trump’s tariffs.
“The problem with Trump is that Powell told the truth.” I wrote it in an editorial Released on Friday. “The main lesson from Trump vs. Powell is that central banks cannot compensate for politicians’ economic policy errors.”
Trump told the Truth Social Post early Thursday morning in his first term in 2018, “Powell’s firing will not be quick enough!”
“If I wanted him, he’d come out of there really quickly, trust me,” Trump told reporters later that day. “I’m not happy with him. I let him know.”
Powell attracted Trump’s rage after offering a stern rating on Wednesday of the economic outlook in light of Trump’s massive tariff overhaul announced on April 3.
“The levels of tariff increases announced so far are significantly greater than expected,” Powell told the Chicago economic club. “The same could be true of economic impacts, including higher inflation and slower growth.”
Prior to Powell’s speech, Trump pushed the Federal Reserve to rapidly lower interest rates, but Powell said independent agencies need to “make more clear” the impact of Trump’s policies before it acts.
Wall Street Journal Board I agree Powell’s ratings were not surprised that Trump had assaulted him.
“President Trump’s tariff war has not been going well, and there is evidence of market conflict and economic slowdown. Therefore, it would have been inevitable that Trump would require the Federal Reserve to ride his rescue by cutting interest rates,” the board wrote. “The Fed’s tough decision is whether we should look past that one-off increase and assume that it will not be part of consumer inflation expectations.”
Trump accused Powell of “too late and wrong” in the Fed’s rate decision.
The editorial board admitted that under Powell’s guidance, the central bank had been wrong in the past. In particular, he nurtured “federal pandemic spending eruptions,” which led to high inflation in the sky, but this time he signed Powell’s careful approach.
“The Fed is trying to achieve some degree of success from that mistake,” the board wrote to its editors. “However, the Fed has not reached its 2% target inflation rate, so Powell is right to be cautious about trying to offset the impact of tariffs by mitigating money too much or too quickly.”
