Trump ramps up attacks on the Federal Reserve but Powell sticks to ‘wait and see’ stance
By CHRISTOPHER RUGABER AP Economics Writer WASHINGTON AP Federal Reserve Chair Jerome Powell on Tuesday stuck to his position that the central bank will keep its key rate on hold while it waits to see how President Donald Trump s tariffs effect the business sector despite the steady stream of criticism from the White House which wants lower borrowing costs Powell speaking in Sintra Portugal at a conference hosted by the European Central Bank also commented that U S inflation is likely to pick up later this summer though he acknowledged that the timing and magnitude of any price increase from the duties is uncertain But he commented the Fed will keep rates on hold while it evaluates the impact of tariffs on the U S economic activity As long as the business sector is in solid shape we think the prudent thing to do is to wait and see what those effects might be Powell reported referring to the sweeping duties Trump has imposed this year Federal Reserve Chairman Jerome Powell speaks during an open meeting of the Board of Governors at the Federal Reserve Wednesday June in Washington AP Photo Mark Schiefelbein Powell s comments underscored the divide between the U S central bank s leader and the Trump administration Trump has repeatedly urged the Fed to cut its key rate which he says would save U S taxpayers on interest costs on the federal administration s massive debt and boost the commercial sector The fight has threatened the Fed s traditional independence from politics though since the Supreme Court signaled the president can t fire the chair financial markets haven t responded to Trump s criticism The Fed chair also mentioned that without tariffs the Fed would allegedly be cutting its key rate right now The central bank went on hold after it saw how large Trump s proposed tariffs were Powell stated and economists began forecasting higher inflation At the same time Powell did not rule out a rate cut at the Fed s next approach meeting July - I wouldn t take any meeting off the table or put it directly on the table Powell commented Most of economists however expect the Fed won t reduce rates until September at the earliest Related Articles Musk proposes a new political party Trump suggests DOGE might have to go back and eat Elon Trump says transients would need to know how to run away from an alligator to flee Florida facility Senate grinds to a standstill as Republicans struggle with Trump s big bill Trump s big bill nears passage in Senate Judges consider whether Trump can use wartime act against Venezuelan gang Tren de Aragua On Monday the president attacked Powell again and extended his criticisms to the entire Fed governing board which participates on interest-rate decisions The board just sits there and watches so they are equally to blame Trump explained The attack on the board ratchets up pressure on individual Fed authorities such as Governor Chris Waller who have been mentioned as promising successors to Powell whose term ends in May The Fed has kept its key short-term interest rate unchanged this year at about after cutting it three times in At a news conference in June Powell suggested that the central bank would learn a great deal more over the summer about whether President Donald Trump s sweeping tariffs would push up inflation or not The comment suggested the Fed wouldn t consider cutting rates until its September meeting Yet a inadequate days later Fed governors Waller and Michelle Bowman who were both appointed by Trump declared that it was unlikely the tariffs would lead to persistent inflation Both also indicated that they would likely encouragement reducing the Fed s rate at its July - meeting
