President Trump Criticizes Fed Over Interest Rates, Inflation
President Donald Trump has escalated tensions with the Federal Reserve after the central bank kept interest rates unchanged Wednesday, accusing it of failing to address inflation.
In a social media post, Trump criticized Fed Chair Jerome Powell and the bank, arguing they "failed to stop the problem they created" for inflation. He also accused the Fed of mismanagement in regulating banks and prioritizing issues unrelated to its monetary policy mandate.
"The Fed has done a terrible job," Trump said, specifically citing focus on "DEI, gender ideology, 'green' energy, and fake climate change."
Trump pledged to tackle inflation by promoting American energy production, reducing regulations, rebalancing international trade, and reviving manufacturing. "I will do much more than stopping Inflation, I will make our Country financially, and otherwise, powerful again!" he stated.
The president's comments signal a potential clash with the Fed over monetary policy direction. Last week, Trump had demanded lower rates, suggesting he expected Powell to heed his request. Powell, however, has indicated no plans to engage with Trump directly on policy matters.
"I’m not going to have any response or comment whatsoever on what the president said," Powell said Wednesday. "It is not appropriate for me to do so."
Powell acknowledged uncertainties in the Trump administration's economic policies, including tariffs, immigration, fiscal policy, and regulations, which may impact Fed actions.
"We don’t need to be in a hurry to adjust our policy stance," he said.
Despite Trump's criticism, the Consumer Price Index (CPI) has shown signs of improvement in December, while economists anticipate a moderate rise in core Personal Consumption Expenditures (PCE) index on Friday.
Powell emphasized the Fed's independence and commitment to its mandate. "The public should be confident that we will continue to do our work as we always have, focusing on using our tools to achieve our goals," he said.
Trump's post also accused the Fed of neglecting bank regulation. He announced that the Treasury Department would lead an effort to reduce regulations to "unleash lending for all American people and businesses."