Donald Trump again attacked Jerome Powell, the president of the American Central Bank this Friday, August 1.
Above all, the US President challenged the members of the Board of Directors of the Federal Reserve (Fed), asking them to “take control and do what everyone knows what to do.”
Therefore, the US president plays the dissension letter he feels in the “Board” of the Federal Reserve.
Disagreements within the Fed
Two governors of the Board of the Board of Directors spoke against the maintenance of the rates, determined by the Fed this Wednesday. It is the first time since 1993 that two members of the decision -making body have been against the decision taken.
Therefore, the pressure is strengthened in Jerome Powell, designated by Trump during his first term, but independent of him according to the statutes of the Central Bank.
Donald Trump has been a drop in these rates for several weeks to support growth and lighten the cost of debt. After the announcement of the maintenance of the rates this week, the US president estimated that Jerome Powell arrived “late, and in reality, too angry, too stupid and too political to do this job.”
Growing growth
Until now, the Federal Reserve adopts a prudent monetary policy and refuses to lighten its rates too fast, which are at a level twice higher than in the Euroeana Union. She fears that a decrease can contribute to climbing prices. Inflation tends to increase in recent months ( + 0.3% in June, + 2.7% in one year) and it is likely that new customs tariffs increase even more the cost of imports.
At the same time, American GDP increased by 3% in the second quarter, in annualized rhythm. The latest figures on employment creations in July are good, with 104,000 positions created, against a destruction of 23,000 jobs in June, according to the monthly survey ADP/Stanford Lab.
This is not the first time that the president of the United States has been in conflict with the president of the Federal Reserve. Ronald Reagan also opposed Paul Volcker, when the latter came from 1979 to a very rapid increase in interest rates to stop high inflation caused by oil clashes.
However, the level of violence of Donald Trump’s attacks is undoubtedly unmatched, so the independence of the Fed could be questioned.
Source: BFM TV
