Jerome Powell, President of the Federal Reserve (Fed), undergoes increasing political pressure from Donald Trump, who demands an immediate drop in interest rates. But Powell does not intend to give in. True to the independence of the institution he directs, he prefers to base himself on economic data rather than on political requirements.
In short
- Donald Trump puts pressure on Jerome Powell for a rapid drop in interest rates.
- The latter refuses to yield, based on solid economic data, in particular inflation still high at 2.5 %.
- The job market remains robust, with a low unemployment rate, which does not justify immediate monetary intervention.
- Trump's pricing policies increase the risk of stagflation, according to the Fed.
- The independence of the Fed is reaffirmed, considered essential to preserve economic stability.
A showdown between Donald Trump and Jerome Powell
For several weeks, Donald Trump publicly has criticized Jerome Powell, going so far as to qualify him as “loser” and threatening to dismiss him. The current owner of the White House relies on a drop in rates to stimulate growth and strengthen its economic program. But the Fed, led by Jerome Powell, believes that this is not yet the right time.
Inflation remains above the lens of 2 %, reaching another 2.5 % in February, according to the PCE indicator. In addition, the job market remains solid, with low unemployment and a consumption that is maintained. So many elements that encourage Fed officials to delay.
A stable but uncertain economy
Fed regional officials, such as Mary Daly (San Francisco) or Susan Collins (Boston), underline The current uncertainty linked to Donald Trump's trade policies, including his high tariffs. The latter could fuel persistent inflation and slow down growth, promoting a dreaded scenario of stagflation.
“”Monetary policy is well positionedSummates Lorie Logan, president of the Dallas Fed, refusing any precipitation in such a volatile context.
The independence of the Fed, a reassuring pillar
Despite the political pressure, the Fed retains its independence from the White House. For investors, this autonomy is crucial. As Evercore ISI analysts recall, Jerome Powell's independence is essential to guarantee economic stability in the face of inflationary risks linked to Trump's political choices.
Jerome Powell keeps the course. As long as the data does not justify a drop, the Fed will remain on its position, despite the criticisms of Donald Trump.
Jerome Powell remains inflexible in the face of Pressures by Donald Trump, favoring a cautious approach based on economic data. In a context marked by uncertainty and inflationary tensions, the Fed defends its independence and maintains the course to ensure the long -term stability of the American economy.
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