Inflation

Trump: If the Federal Reserve lowers interest rates to 1%-2%, he may "not fire" Powell

ChainCatcher news, according to Jinshi Data, U.S. President Trump posted on social media: "Mr. Powell complains about cost issues, which are largely caused by Biden's false 'government.' But he could have done the greatest and most outstanding work for our country by helping to lower interest rates—if he could bring interest rates down to a reasonable level of 1% to 2%, then this 'fool' could save the United States up to $1 trillion a year.I fully understand that my strong criticism makes it harder for him to do what he should do (i.e., lower interest rates), but I have tried all different ways. I have been friendly, I have remained neutral, and I have been sharp-tongued—but friendliness and neutrality don't work! He is a stupid guy and clearly my opponent; he shouldn't be in that position at all. I listened to the wrong people back then, and Biden shouldn't have reappointed him. We currently have almost no inflation, our economy is performing very well, and with the influx of huge tariff revenues and factories being built across the country, the economy will soon be more prosperous than ever.If he really cares about inflation or any other issues, he just needs to lower interest rates so we can benefit from the interest costs; if those 'other factors' really appear in the future (I doubt it!), then he can raise rates. But don't say you think inflation will appear at some point in the future because it isn't here now—but if it does appear, then raise rates! I don't understand why the committee doesn't overturn this complete fool! Maybe, just maybe, I need to change my mind about firing him? But anyway, his term is about to end soon!"

Federal Reserve Mouthpiece: The reason the Federal Reserve is holding steady is that there are risks associated with any measures taken

ChainCatcher news, referred to as the Federal Reserve's mouthpiece, Wall Street Journal reporter Nick Timiraos stated, "Currently, the Federal Reserve's goal in setting interest rates is not to help manage federal borrowing expenditures, but to maintain low and stable inflation in a strong labor market. The Federal Reserve is holding steady because it sees risks no matter what actions it takes. After four consecutive years of inflation above the target level, the inflation rate is close to the Federal Reserve's 2% target but has not fully reached it.If the Federal Reserve lowers rates too early, it may trigger inflation again. Many economists expect that due to rising import costs, businesses will raise prices, and lowering rates could stimulate more economic activity at the wrong time. The Federal Reserve does not want a situation where, a year later, the inflation rate jumps back above 3% and stays at that level.If the wait is too long, economic uncertainty combined with rising costs from tariffs could squeeze corporate profits, leading to layoffs and economic recession. The real estate market has recently slowed down, indicating that rising borrowing costs remain a significant obstacle in interest rate-sensitive sectors of the economy.The Federal Reserve has even more reasons to keep interest rates unchanged, as conflicts in the Middle East could reverse the recent decline in energy prices. This uncertainty alone strengthens the case for caution, as it adds one supply shock on top of another driven by tariffs."
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