Trump Questions Fed's Interest Rate Decisions, Plans to Engage with Powell
Davos, Switzerland - President Donald Trump has expressed concerns over Federal Reserve Chair Jerome Powell's interest rate decisions and indicated his intention to discuss the matter with him in the future.
Trump, speaking to reporters from the Oval Office on Thursday, said he believes he has a better understanding of interest rates than the Fed and implied that he would challenge Powell's authority if necessary. "If I disagree, I will let it be known," he stated.
Trump's comments follow his virtual address at the World Economic Forum, where he pressured Saudi Arabia to lower oil prices and advocated for immediate interest rate cuts. He believes these measures could alleviate inflation and support the U.S. economy.
Despite rising energy costs being a significant contributor to inflation, the Fed must also address price pressures in other sectors. Excluding food and energy, the consumer price index has increased by 3.2% over the past year.
Although presidents typically avoid commenting on central bank policy, Trump has previously stated that he should have the authority to influence Powell's decisions. Powell, who has faced criticism from Trump during his presidency, has emphasized that the Fed will make rate decisions based on economic conditions and without political interference.
Following three rate cuts in late 2024, Fed policymakers anticipate holding rates steady until inflation shows sustained progress towards their 2% target. The next Fed meeting is scheduled for January 28-29 in Washington, D.C.