Donald Trump has said he has no plans to fire the Federal Reserve chair, Jerome Powell, and suggested the draconian tariffs the US has imposed on China could be lowered.
The president’s comments come days after he called the central bank boss a “major loser” whose “termination cannot come fast enough” and defended his tariffs after they triggered stock market sell-offs.
“I have no intention of firing him,” Trump told reporters in the Oval Office on Tuesday. “I would like to see him be a little more active in terms of his idea to lower interest rates,” he added.
Trump added that the 145% tariffs his administration has imposed on China were “very high”. “It will come down substantially. But it won’t be zero. It used to be zero,” he said.
Earlier this month, after another volatile day for stock markets, Trump dismissed investors’ reactions. “Sometimes you have to take medicine to fix something,” he said.
Those comments came after US stock markets had bounced back from a sharp sell-off triggered in part by fears that the president was planning to oust the Fed chair.
Trump has lashed out at the Federal Reserve in recent days, nicknaming Powell “Too Late” and arguing that the Fed should cut interest rates immediately.
The attacks on the independence of the US central bank rattled investors and hit stock and bond prices. The price of gold, seen as a safe haven, has reached record highs.
The Fed has a dual mandate: to maximise employment while keeping inflation in check. It increased interest rates after the Covid pandemic in order to cool rising prices, and initiated a series of rate cuts as the rate of inflation cooled and the US jobs market remained healthy.
But the central bank has been holding off on further rate cuts as inflation has stayed stubbornly above the Fed’s target rate of 2% a year. Last week, Powell warned that Trump’s imposition of tariffs on most of the US’s trading partners could worsen inflation.
The comments sparked fresh criticism from Trump, who has said of Powell: “If I want him out, he’ll be out of there real fast, believe me.”
Asked on Tuesday whether he had plans to oust Powell, Trump said: “None whatsoever. Never did. The press runs away with things. No, I have no intention of firing him.”
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