His successor, former President Donald Trump, escalated the attacks to a new level. He’s not satisfied with the status quo interest rates and calling instead for sharper and swifter cuts. His recent comments put President Biden squarely in the crosshairs of Jerome Powell, the chair of the Federal Reserve. Powell has been the target of Trump’s ire whenever monetary policy has disappointed.
For the record, Trump’s rage at the Fed over the rate hike is nothing particularly new. It has been ongoing for many months. He has contended that the Federal Reserve has been too slow to respond to the economic crisis. He’s hoping the current economic conditions will prove opportune for several ratchet-downs.
“We’re in a good spot right now for talking about bringing the rate down,” said Christopher Waller, a member of the Fed’s Board of Governors. This comment would seem to be consistent with Trump’s sentiments, indicating that there is still flexibility for easing up monetary policy.
For his part, the former president has been on Powell’s case since day one, begging Powell to stop fighting inflation and killing economic growth in the process. Trump is right to think that lower interest rates would deliver a jolt of economic activity and create benefits for consumers and businesses in all sectors. His public statements suggest that he wants to move the Fed much faster in pursuit of these goals.
This relentless critique tells a deeper tale. Indeed, Trump and his appointed political leaders and staff aren’t just fighting with the Federal Reserve Chairman—he is fighting for the future of monetary policy. While Trump calls for immediate action, officials like Waller suggest a more cautious approach, advising to “look through these type of price shocks.” This is a telling indication of a broader divide over how the Fed should steer in today’s choppy and changing economic waters.