President Trump urged the Federal Reserve on Friday to take decisive action if Jerome Powell doesn’t reduce interest rates immediately.
In a post on Truth Social, he referred to Powell as “the stubborn idiot Jerome ‘too late’ Powell,” insisting that the Fed must act swiftly. He warned that if Powell continues to hesitate, the board should take matters into their own hands.
This latest criticism followed the Fed’s decision to keep interest rates steady at a target of 4.25% to 4.5%, which came after a downgrade of economic forecasts.
In a subsequent post, Trump noted that dissent among Fed officials is “just strengthening.” Governors Christopher Waller and Michelle Bowman voted against Powell’s cautious approach, marking a significant moment as it’s the first time in three decades that multiple governors have opposed a vote on interest rates.
Both officials expressed concerns over economic risks and advocated for a cut of a quarter percentage point, suggesting that Trump’s tariffs have a limited effect on inflation in the long term.
“It’s completely normal to have different interpretations of the incoming data and to discuss how tariffs might shape the economy,” Waller stated on Friday.
However, he voiced concerns that Powell’s current strategy might be overly careful, which could result in mismanaging economic risks. Waller mentioned Trump’s tariff impact has been “smack so far” and could persist in that manner.
Bowman shared her thoughts, suggesting that any delays might worsen job market conditions and hinder economic growth. Meanwhile, the Labor Bureau reported a slower-than-expected increase in non-farm payrolls, with numbers showing an increase of just 73,000 jobs. The unemployment rate ticked up to 4.2% in July, supporting the employment concerns raised earlier.
While Trump was advocating for a substantial cut of 3 percentage points, Waller and Bowman were leaning towards a more cautious approach, with Waller proposing a gradual reduction of up to 1.5 percentage points and Bowman favoring “incremental cuts.”
