20 March 2025
Financial Insyghts President Peter Atwater talks how investors should approach the volatility of policy changes in the Trump administration.
President Donald Trump said the Federal Reserve should cut interest rates, splitting with the US central bank as officials weigh the economic cost of his tariff push.
“The Fed would be MUCH better off CUTTING RATES as U.S.Tariffs start to transition (ease!) their way into the economy,” Trump said in a post on Truth Social. “Do the right thing. April 2nd is Liberation Day in America!!!”
Trump’s post Wednesday evening comes as his administration prepares to unveil a fresh wave of tariffs, which Federal Reserve Chair Jerome Powell signaled was hanging over forecasts.
Fed officials held their benchmark interest rate steady on Wednesday for a second straight meeting, as expected by economists. Powell downplayed simmering concerns about a slowdown but acknowledged tariff uncertainty was a factor and already contributing to goods inflation, but may prove transitory. Trump’s administration is preparing to announce a fresh wave of tariffs on April 2, though the exact scope isn’t clear. Trump has promised so-called “reciprocal” tariffs on at least some nations, though his administration has not specified which ones or at what rate, and his key economic advisers have competing views on the best way to approach tariff policy.
The public push back on interest rates comes as the Trump White House tries to make its case for stiffer tariffs amid a mixed economic picture in the US. Inflation has not abated as much as American consumers would like. High interest rates are squeezing the housing market, and economists now see economic growth slowing in the upcoming months.
Trump has sent repeated mixed messages on the Fed — at times calling for cuts and otherwise declining to intervene. Similarly, during the campaign, he vacillated on how independent he said the Fed should be from the White House.
No comments:
Post a Comment