Donald Trump asks Powell to ‘stop politics and cut rates’ after Fed chair flags risk of higher inflation, slow growth | World News

Federal Reserve Chair Jerome Powell on Friday warned that United States (US) President Donald Trump’s newly announced tariff actions are “larger than expected” and could lead to both higher inflation and slower economic growth.
Pointing towards the uncertainty surrounding the economic outlook, Powell noted that the Fed will need to carefully monitor the impact of these trade policies before deciding on any adjustments to monetary policy.
“We face a highly uncertain outlook with elevated risks of both higher unemployment and higher inflation,” undermining both of the Fed’s mandates of 2 per cent inflation and maximum employment, Powell said in prepared remarks for a business journals’ conference.
Story continues below this ad
“We are well positioned to wait for greater clarity before considering any adjustments to our policy stance. It is too soon to say what will be the appropriate path for monetary policy,” he added.
President Trump, however, lashed out at Powell, saying it was the “perfect time” to cut interest rates.
“This would be a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates. He is always “late,” but he could now change his image, and quickly. Energy prices are down, Interest Rates are down, Inflation is down, even Eggs are down 69%, and Jobs are UP, all within two months – A BIG WIN for America.”
“CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!,” Trump said on Truth Social.Story continues below this ad
Powell’s comments came as global markets continued to slide, with US stock indexes down 10 per cent since Trump’s tariff announcement on Wednesday. On Friday, China responded with its own set of countermeasures, including 34% tariffs on all US goods, export restrictions on key minerals, and limits on American agricultural imports.
Powell added that while the Fed does not take a stance on policy decisions, its role is to assess their economic impact, particularly the risk of sustained inflation. “While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persent,” he said.
“Avoiding that outcome would depend on keeping longer-term inflation expectations well anchored, on the size of the effects, and on how long it takes for them to pass through fully to prices. Our obligation is to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem,” Powell added.
© IE Online Media Services Pvt Ltd
Expand