WASHINGTON, DC—Federal Reserve Chair Jerome Powell declared Tuesday he won’t lower interest rates if it could boost President Trump’s economic image. The Powell-interest-rates-Trump standoff has fueled political and economic tensions.
Trump has demanded Powell’s resignation, arguing rate cuts would spark growth by encouraging borrowing and business expansion. Powell, however, insists on holding rates steady to avoid aiding Trump. “I’m a public servant ensuring Trump doesn’t look good,” Powell said. “High rates protect democracy.” For more on economic policy, visit Bloomberg.
Trump called Powell “dumb” and criticized his appearance, claiming, “Whoever appointed him is an idiot.” Powell, stung by the remarks, hinted at raising rates higher. “Let’s see how Trump handles that,” he said.
The feud escalated as Trump labeled Powell a “weak-faced economist.” Learn about Federal Reserve decisions at Reuters. At press time, rates remained unchanged, frustrating economic optimists.