President Donald Trump once again gave a lousy review to Federal Reserve Chairman Jerome Powell – and this time told him the precise amount by which he should lower a key interest rate.
‘I think he’s doing a terrible job,’ Trump said of Powell, when asked about the performance of the chair of the board of governors of the independent Fed, who he routinely calls ‘Mr. too late.’
‘I think we should be, no, I think we should be three points lower interest rate. He’s costing our country a lot of money. We should be number one, and we’re not, and that’s because it’s Jerome Powell – in terms of interest. We are number one in the world. Look, I’ll tell you a little simple a little simple language,’ Trump said.
After blaming Powell for the fed not being ‘number one’ in rates, Trump repeated his refrain that the U.S. was now ‘hot.’
‘One year ago, our country was a dead country. We were going nowhere except down. We were the laughing stock all over the world, and now we’re the hottest country anywhere in the world. We’re number one everywhere, anywhere in the world, and that’s all they’re talking about, is our country. One year ago, is a dead country. Now it’s the hottest country anywhere in the world.
The key federal funds rate is now between 4.25 and 4.5 percent. A three point cut would put it at 1.25 percent.
The fed kept rates near zero during the depths of the financial crisis in 2009 and again when the COVID pandemic hit in 2020. A rate of pandemic would have put the rate at between 1 and 1.5 percent back where it was amid massive job losses early in the pandemic as rates were on the way down.
It was at that level two years later in 2022 as the fed was hiking rates in an attempt to cool inflation.
Such a dramatic drop in rates could make it cheaper to buy a home and could boost employment, which is already at historically low levels, but could also fuel another bout of inflation.
Last week Trump said Powell should ‘resign immediately,’ after previously indicate he might try to fire him. Powell’s term ends in May 2026, and the Supreme Court has signaled the president might lack the authority to fire the head of the fed.
In another escalation Thursday, Trump’s budget director Russell Vought slammed Powell for blowing money on renovations of the fed’s massive DC headquarters.
He wrote that he had ‘grossly mismanaged’ the central bank.
‘Instead of attempting to right the Fed’s fiscal ship, you have plowed ahead with an ostentatious overhaul of your Washington, D.C., headquarters,’ Vought wrote, in a letter he posted on X.
He said costs had ballooned to $700 million, and called out such features as ‘VIP dining rooms’ and ‘premium marble,’ with each employee getting an average of 512 square feet.
‘While continuing to run a deficit since FY23 (the first time in the Fed’s history), the Fed is way over budget on the renovation of its headquarters. Now up to $2.5 billion, roughly $700 million over its initial cost,’ Vought wrote.
However Trump himself this week bragged about his own new renovations to the historic White House cabinet room, which he said had been done at little cost.
When asked about accusations that Powell had lied about the renovations when testifying before Congress, Trump said ‘Then he should resign immediately.’
Vought said Powell’s testimony ‘has led to serious questions that now require additional oversight from OMB.’