Donald Trump presses Federal Reserve President Jay Powell to reduce interest rates

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Donald Trump increased pressure on Federal Reserve, Jay Powell, to reduce borrowing costs, which led to a possible clash between the two men less than a week before the US Central Bank meeting to determine interest rates.

During his appearance in the Oval Office on Thursday to sign several new executive orders, Trump said he knows this Rates “Better” than the Federal Reserve, and wants to see it decreases “a lot.”

It is widely expected that the US Central Bank will keep the record interest rate between 4.25 and 4.5 percent next week, which represents a temporary stop after three consecutive discounts since September.

the Federal Reserve Bank The Federal Reserve pointed out that the pace of cuts this year are slowing down with some officials concerned that Trump’s plan to increase customs duties, reduce taxes and take strict measures against immigration will hinder efforts to reduce inflation to 2 percent.

“Fears (at the Federal Reserve Bank) are not only related to customs tariffs, but also recognizing that fiscal policy will not help reduce inflation,” said Mahmoud Bradan, the economist in Amondi.

But the most cautious position taken by the Federal Reserve puts it on a collision path with the new American president.

Trump He said on Thursday that he expected the Federal Reserve to listen to its demands and will speak with Powell “in time.”

“I think I know interest rates much better than them, and I think I definitely know her much better than the person responsible primarily for making this decision,” Trump said. “If I do not agree to that, I will tell you that.”

Trump raised Powell to the position of President of the Federal Reserve during his first term, but he was often criticizing him, especially because he did not reduce interest rates at a speed enough in 2019. The president indicated during his campaign last year that he would not try to dismiss Powell from his position . Before his mandate ended in 2026.

“If the Federal Reserve continues to keep interest rates as it is and it is believed that it will be great to get a batch of low interest rates, then there will be a real opportunity for the conflict,” said Douglas Holtz Ecin, president of the American Labor Forum. The center -right policy institute.

Some economists said that if Trump’s policies lead to high prices, the Federal Reserve may be forced to retract more discounts or even raise borrowing costs.

“If the administration does things already starts to raise the inflation rate, the Federal Reserve’s delegation is completely clear – they will raise interest rates. Mark Bleith, professor of economics at the University of Brown, said:” They will strike their neck (from Trump) if they do so. ”

Trump used a speech he gave to CEOs in Davos earlier on Thursday to say he wanted to reduce interest rates “all over the world” – and asked OPEC to do so. Reducing oil prices To achieve this.

He touched on the topic again in his statements to reporters at the Oval Office after a few hours.

“I would like to see oil prices drop, and when energy prices drop, this will lead to a lot of inflation. Trump said:” This will reduce interest rates automatically. “

On Thursday, new doubts about Washington’s commitment to NATO and called for increasing defensive spending by the United States allies in the treaty.

He said about NATO countries: “They do not protect us.” “We protect them. So I don’t think we should spend, and I am not sure that we should spend anything, but we must definitely help them. But they should increase 2 percent (from GDP on defensive spending) to 5 in The hundred.

Trump’s comments in NATO came a day after Foreign Minister Marco Rubio, who has been sworn in, was the United States’ commitment to the group, according to his conversation with the Secretary -General of the Alliance, Mark Retti.

Among other executive orders signed by Trump on Thursday, he ordered the establishment of a national stock of encrypted currencies and another to allow the release of federal files related to the assassination of President John F. Kennedy, former Attorney General Robert F. Kennedy, and civil rights leader Martin Luther King Junior. .

“The American people deserve transparency and truth,” Trump said. “Many people are waiting for this for years, for decades, and everything will be revealed.”