The President of the United States, Donald Trump, estimated on Wednesday that the quarter-point cut in interest rates announced by the Federal Reserve (Fed), which leaves them between 3.5% and 3.75%, It’s “fairly small”. “I would say it could have doubled, at least doubled,” he said during a roundtable with businessmen at the White House shortly after Fed Chairman Jerome Powell, of whom the president has been highly critical, announced the new cut.
Trump has blamed the Federal Reserve for hurting economic growth by keeping interest rates higher than he would like. “This is what they do: they kill growth“, denounced the Republican, who described the president of the Fed as “rigid”. “They are afraid of inflation,” he declared.
“Our prices should be much lower. Our prices should be the lowest in the world“Because all these countries that you see with low rates, many of them are because of us, because they take a lot of money from us,” he insisted. “We should have the lowest rates in the world. Without us, none of them (the rest of the countries) would really exist as an economy,” he reiterated.
Furthermore, the American president announced that he would meet this Wednesday with the former governor of the Federal Reserve, Kevin Warsh. Warsh and National Economic Council Director Kevin Hassett are two of the leading candidates to succeed Powell when his term ends in May. “I’m looking for someone who is honest with interest rates”Trump noted.
The fall in the price of silver has three votes against, one more than at the October meeting, after Stephen Miran advocated a half-point reduction from the majority, the same reduction that Trump requested. On the contrary, Kansas Fed Governor Jeffrey Schmid and Chicago Fed Governor Austan Goolsbee defended keeping rates unchanged.
Powell assured that the discrepancies were the result of “unusual” shock of upward risks for inflation and downward risks for the labor market. “The persistence of this tension is very unusual. (…) The debates we are having are as productive as any we have had during my 14 years at the Fed. They are very serious, respectful and with people with firm convictions. (…) Today, we made a decision. Nine of the 12 members supported it. So there was quite broad support”, he underlined during a press conference.
Even though Trump was unhappy with the Fed’s decision, the central bank complied with market and analyst expectationswho thought he would close the year with a further drop in the price of silver despite the double challenge he faces at a time marked by the effects of the Trump government’s tariffs, a labor market close to full employment and inflation still far from the 2% target.
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