Shows you who really is in charge, does it not? The Fed makes the rules…
Republican presidential candidate Donald Trump has stated that he would allow Federal Reserve Chair Jerome Powell to complete his term if he wins the November election. “I would let him serve it out, especially if I thought he was doing the right thing,” Trump said in a Bloomberg News interview from June.
Powell’s term as chair ends in May 2026, while his position on the Fed board extends until 2028. Trump also cautioned that the Fed should not cut interest rates before the November election, which could potentially boost the economy and benefit President Biden. Wall Street anticipates that the Fed will cut interest rates twice by the end of the year, with the first reduction expected in September.
📍Summary of Donald Trump’s interview with Bloomberg
Federal Reserve:
– Trump would allow Jerome Powell to complete his term as Fed Chair if he wins the November election.
– Urged the Federal Reserve to avoid cutting interest rates before the election.
Economic Policies:
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“It’s something that they know they shouldn’t be doing,” Trump asserted.
Although Trump nominated Powell to lead the central bank in 2017, he frequently criticized Powell during his presidency, threatening to fire him and calling him a “bonehead” for raising interest rates. In appointing Powell, Trump broke with tradition by not reappointing Janet Yellen, the former Fed chair nominated by President Barack Obama, for a second term.
In a February interview with FOX Business’ Maria Bartiromo, Trump said he would not reappoint Powell to a third term as Fed chief, accusing him of being political and suggesting he might lower interest rates to help the Democrats. Policymakers raised interest rates significantly in 2022 and 2023 to the highest level in over two decades to slow the economy and curb inflation. Officials are now deliberating on when to ease off as signs indicate that inflation is stabilizing.
Trump says he would let Fed Chair Powell finish his term if he wins in November, Bloomberg reports https://t.co/JzUuYSShSI
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Higher interest rates generally lead to increased rates on consumer and business loans, which in turn slow the economy by causing employers to cut back on spending. This has pushed the average rate on 30-year mortgages above 8% for the first time in decades, with borrowing costs for home equity lines of credit, auto loans, and credit cards also rising.
Key Points:
- Trump said he would allow Fed Chair Jerome Powell to complete his term if elected.
- Trump warned against the Fed cutting interest rates before the November election.
- Despite nominating Powell in 2017, Trump has frequently criticized him.
- Trump would not reappoint Powell for a third term, accusing him of political bias.
- Higher interest rates have increased borrowing costs, affecting mortgages and loans.
Conner T – Reprinted with permission of Whatfinger News
