Jerome Powell is “a fool who has no idea,” wrote the President of the United States on social media.
The Fed’s decision, made unanimously, was explained by the inability to predict the future of the U.S. economy in light of the fluctuations caused by the new tariffs imposed by the President.
There is “so much uncertainty” regarding the impact of these tariffs on imports that the Fed prefers not to change its rates for now, Powell explained in a press conference.
Since the last meeting of the United States central bank in March, the American Republican administration led by Trump has triggered an economic upheaval.
On what he himself called “Liberation Day,” April 2, Trump implemented a series of new tariffs on products imported into the United States, a measure that affected almost all of Washington’s trading partners.
Since then, Trump has partially backtracked and promised “deals” with the United States’ key partners to reduce tariffs, but they remain significantly higher than before the start of his second presidential term, with trade transactions with China nearly halted.
The maintenance of interest rates (within a range between 4.25% and 4.50% since December) was widely anticipated by the markets, and the New York Stock Exchange closed the session higher following the announcement of this decision.
Jerome Powell admitted that the Fed might face a challenge if unemployment rises alongside prices, leading to efforts to contain inflation. In such cases, a central bank typically raises its main interest rates, which determine the cost of credit for businesses and individuals.
Conversely, if jobs are lost, interest rates are expected to be reduced to stimulate economic activity.
The Fed — and primarily its chairman — faces constant criticism from Donald Trump, who wants to see interest rates decrease, which would slightly mitigate the impact of tariffs on inflation.
The presidential statements “do not affect our work in any way,” Powell assured, adding that the Fed always considers “only economic data, forecasts, and the balance of risks.”
