Trump attacks Fed's approach, avoids talking about interest rates
US President Donald Trump attacked the Federal Reserve's approach to regulating banks, accusing its chairman, Jerome Powell, of blundering in fighting inflation, while refraining from commenting directly on interest rates.
"The Federal Reserve has done a terrible job regulating banks. The Treasury Department will lead the effort to reduce unnecessary regulation and unleash lending for all American people and businesses," Trump wrote on his Truth Social account on Wednesday.
The Federal Reserve on the effects of Trump's policies on the economy: We will wait to evaluate them
Federal Reserve Chairman Jerome Powell answered the question on everyone's mind around the world, which is how the US economy will be affected by President Donald Trump's policies, but his answer was not conclusive.
Powell indicated in the press conference he held after announcing the decision of the Open Market Committee on interest rates, that "we do not know what will happen with tariffs, immigration, fiscal policy, or regulation."
He added: "We need to allow these policies to work before we can begin to make a reasonable assessment of what their effects on the economy will be," considering that "the possibilities are very wide.. and I do not want to start speculating, because we do not know how things will crystallize." He concluded that "the best we can do is what we have done so far.. waiting and studying the situation." Powell on Diversity, Inclusion Policy: We Align Our Policies with Executive Orders Consistent with the Law
Federal Reserve Chairman Jerome Powell said the institution is “aligning our policies with executive orders consistent with applicable law,” when asked about President Donald Trump’s executive orders to limit diversity, equity, and inclusion efforts.
Powell declines to comment on Trump’s pressure to cut rates
Federal Reserve Chairman Jerome Powell declined to comment on President Donald Trump’s pressure to cut rates, saying there had been no contact with the new president.
Powell added that the Fed “will continue to do its job and achieve its goals. That’s how we serve our citizens.”
Powell: We won’t reconsider our inflation target
Federal Reserve Chairman Jerome Powell stressed that policymakers will not reconsider their 2% inflation target.
The Fed chairman commented on the changes in the Fed statement, saying: "We did not want to send any signal other than that we are committed to our 2% inflation target."
He added that inflation expectations are rising slightly in the short term, not the long term, which may be related to some policies, indicating that the committee will wait to see what policies will actually be implemented.
He added: "We do not know what will happen with tariffs, immigration, regulations.. We have not seen much yet," and continued: "I think we will wait to formulate this policy before assessing its implications for the economy. We are not in a hurry."
The Fed chairman pointed out that "there is a high level of uncertainty at the moment, due o the changes in policies. We cannot be sure.. So we will wait and see what happens."