The tension between the White House and the Fed continues to increase as the announcement of new economic policies is approaching. Trump will apply new tariffs since April 2 and seek that the entity presided over Jerome Powell down the rate.
The administration of Donald Trump It is in full offensive to implement a new wave of tariffs, while the president insists that the Federal Reserve (Fed) ought Cut interest rates to boost the economy. This position has generated tensions with the US Central Bank, which until now has maintained its reference rate without changes.
Trump redoubles the pressure on the Fed
Through his social truth social network, Trump said the Fed “It would be much better if you lower interest rates as American tariffs begin to make their way to the economy.”. In addition, in a challenging tone, he added: “Do the right thing. April 2 is the day of liberation in the United States!”
The message was published in a context of economic uncertainty, where inflation still does not yield to the expected rhythm and high interest rates continue to affect key sectors such as real estate. The Fed, chaired by Jerome Powell, He pointed out that the impact of new tariffs on inflation could be transitory, although he acknowledges that they generate uncertainty in economic projections.
A challenging economic panorama
For the second consecutive meeting, the Fed decided to maintain its reference rate in a range of 4.25%-4.5%. This measure responds to a slower economic growth than expected, with forecasts that place GDP expansion by 1.7% for the year, below the 2.5% projected by the Trump administration.
From the White House, the economic advisor Kevin Hassett insisted that they respect the independence of the Fed, but made it clear that the vision of the Executive is different in terms of growth and monetary policy.
New Trump Tariff Offensive
On April 2, the Trump administration plans to announce a new tariff package with the aim of establishing a “reciprocal” trade with several nations, although they have not yet specified which will be the affected countries or the exact percentage of the rates. Within the government there are positions found on the best way to apply these measures without affecting internal growth.
Trump has oscillated in his position on the independence of Fed. Although he has declared that he will allow Powell to complete his mandate, in the past he has questioned his leadership and has suggested that a president should have more influence on the decisions of the Central Bank.
The tension between the White House and the Fed continues to increase as the announcement of new economic policies is approaching. With still high inflation and a market that shows signs of deceleration, the Fed response will be key to defining the course of the US economy in the coming months.
Source: Ambito
