Donald Trump has attacked the head of the US central bank for not cutting interest rates, stating that Jerome Powell’s “termination cannot come fast enough!”.
The US president took to social media to renew his criticism of Powell ahead of the third interest rate cut this year by European Central Bank (ECB).
On Thursday, it announced that it had reduced the key rate “owing to rising trade tensions”.
Trump, who nominated Powell as Federal Reserve chair in 2017 during his first term, wrote that he “is always TOO LATE AND WRONG” on reducing borrowing costs.
Trump continued: “Oil prices are down, groceries (even eggs!) are down, and the USA is getting RICH ON TARIFFS. Too Late should have lowered Interest Rates, like the ECB, long ago, but he should certainly lower them now.”
While oil prices have fallen since the start of the month when Trump unveiled his tariff regime, eggs prices have risen to $6.23 per dozen, according to official data.
Meanwhile, the BBC has found no evidence for Trump’s claims about how much money the US is collecting from tariffs.
As Trump attacked Powell, Christine Lagarde, president of the ECB defended her American counterpart.
“I have a lot of respect for my friend and esteemed colleague Jay Powell,” said Lagarde as she discussed the decision to cut European interest rates from 2.5% to 2.25%.
“We have a solid, steady relationship amongst central bankers.”
The president lashed out after Powell said on Wednesday that US economic growth will be hit and prices will rise for consumers as a result of Trump’s tariffs.
He said the import taxes were larger than the bank had expected, going beyond the higher end of its estimates.
There has been turmoil on global stock markets as investors reacted to the tariffs and an escalating trade war between the US and China.
Mr Powell said: “The level of the tariff increases announced so far is significantly larger than anticipated.
“The same is likely to be true of the economic effects, which will include higher inflation and slower growth.”
The US president has said tariffs will boost US manufacturing and jobs but economists have warned they risk fuelling inflation. Trump campaigned on cutting inflation.
It is not the first time that Trump has targeted Powell, who he nominated to replace Janet Yellen who the president accused of keeping interest rates too low.
The president’s campaign promises included calls for lower interest rates in order to bring relief to borrowers.
Since returning to office, Trump has stoked a trade war by introducing a 10% tax on goods being imported to the US from the vast majority of countries.
He has escalated tariffs further with China by putting a 145% tax on Chinese goods, though there are some exemptions for smartphones. China has hit back with tariffs of 125% on US products. The White House said on Wednesday that when the new tariffs are added on to existing ones the levies on some Chinese goods could reach 245%.
Mr Powell said that despite the uncertainty and ructions in the markets, the “US economy is still in a solid position”.
For now, he said, the Fed could keep its benchmark interest rate steady “to wait for greater clarity before considering any adjustments”.
The Fed’s benchmark interest rate is currently set in a range between 4.25% and 4.5%, where it has been since December following a series of rate cuts late last year.
If tariffs push up inflation, as many economists expect, the Fed could decide to hold or even raise rates. Traders on Wednesday kept their bets it will continue to cut rates this year.
But the Fed also has a mandate to maintain maximum employment as well as stable prices.
Should it be caught between rising inflation and a rising unemployment rate, Mr Powell said “we would consider how far the economy is from each goal” and then look at “the potentially different time horizons” for getting prices under control and bringing the unemployment rate down.
“As that great Chicagoan Ferris Bueller once noted, “life moves pretty fast”, he added.
