\n<\/p>\n
The chair of the Federal Reserve, Jerome Powell, has blamed Donald Trump\u2019s tariffs for preventing the immediate interest rate cuts the president has demanded.<\/p>\n
Trump has repeatedly urged Powell to reduce borrowing costs in the US economy. On Tuesday, he said: \u201cAnybody would be better than J Powell. He\u2019s costing us a fortune because he keeps the rate way up.\u201d<\/p>\n
He spoke not long after Powell told a European Central Bank (ECB) event in Portugal that the Fed was waiting to assess the inflationary impact of the president\u2019s trade policies.<\/p>\n
Speaking on a panel of central bankers in Sintra, the Fed chair said: \u201cIn effect we went on hold when we saw the size of the tariffs. Essentially all inflation forecasts for the United States went up materially as a consequence of the tariffs. We didn\u2019t overreact, in fact we didn\u2019t react at all. We\u2019re simply taking some time.\u201d<\/p>\n
Asked if the Fed would have cut its key Fed funds rate further, from the current target range of 4.25-4.5%, if it wasn\u2019t for tariffs, Powell said: \u201cI think that\u2019s right.\u201d<\/p>\n
Economists generally expect tariffs to be inflationary, as the costs of paying them tend to be passed on to consumers. The effects are highly uncertain, however, as some retailers may be able to absorb some or all of the costs, or switch to alternative suppliers.<\/p>\n
Powell said: \u201cWe haven\u2019t seen effects much from tariffs, and we didn\u2019t expect to by now. We\u2019ve always said the timing, amount and persistence of the inflation would be highly uncertain and it\u2019s certainly proved that.\u201d<\/p>\n
He added: \u201cWe\u2019re watching. We expect to see over the summer some higher readings, but we\u2019re prepared to learn that it can be higher, or lower, or later or sooner than we\u2019d expected.\u201d<\/p>\n
Trump has consistently sought to undermine Powell since returning to the White House, peppering him with insults such as, \u201cmajor loser\u201d and \u201cvery dumb\u201d, and reportedly considering replacing him before his term finishes in May next year.<\/p>\n
When these personal attacks were raised at the ECB event, the Fed governor received a round of supportive applause from the audience \u2013 and from his fellow central bankers on the panel.<\/p>\n
The US treasury secretary, Scott Bessent, has suggested the Trump administration might take advantage of the opening of a vacant seat on the Fed\u2019s board to appoint a potential successor.<\/p>\n
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Sign up to Business Today<\/span><\/p>\n Get set for the working day \u2013 we’ll point you to all the business news and analysis you need every morning<\/p>\n Privacy Notice: <\/strong>Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy. We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply.<\/span><\/p>\n after newsletter promotion<\/p>\n \u201cThere\u2019s a seat opening up \u2026 in January. So we\u2019ve given thought to the idea that perhaps that person would go on to become the chair when Jay Powell leaves in May,\u201d he told Bloomberg TV.<\/p>\n Speculation that Trump could replace Powell early has been one factor behind the depreciation of the dollar, which has suffered its weakest first-half in more than 50 years.<\/p>\n Speaking alongside Powell on Tuesday, the ECB president, Christine Lagarde, suggested it was too soon to declare \u201cmission accomplished\u201d on inflation in the eurozone; while the Bank of England governor, Andrew Bailey, said there were signs that the jobs market in the UK was slowing.<\/p>\n","protected":false},"excerpt":{"rendered":" The chair of the Federal Reserve, Jerome Powell, has blamed Donald Trump\u2019s tariffs for preventing the immediate interest rate cuts the president has demanded. Trump has repeatedly urged Powell to reduce borrowing costs in the US economy. On Tuesday, he said: \u201cAnybody would be better than J Powell. He\u2019s costing us a fortune because he<\/p>\n","protected":false},"author":1,"featured_media":9833,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[2432,2431,562,319,519,150,2433,2434,517,72,71],"class_list":{"0":"post-9832","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-blames","9":"tag-chair","10":"tag-cuts","11":"tag-federal","12":"tag-interest","13":"tag-news","14":"tag-preventing","15":"tag-rate","16":"tag-reserve","17":"tag-tariffs","18":"tag-trumps"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/9832","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9832"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/9832\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/9833"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9832"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9832"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9832"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}