Trump criticizes Powell again on social media, calls him a ’fool’

Investing.com -- President Trump criticized Federal Reserve Chair Jerome Powell on social media, calling him a ’fool’, despite recently stating that he would not dismiss Powell before his term ends in the next year. Trump voiced his criticism on Truth Social, arguing that Powell lacks understanding, but also paradoxically expressing his fondness for him.

Trump wrote, "’Too Late’ Jerome Powell is a FOOL, who doesn’t have a clue. Other than that, I like him very much! Oil and Energy way down, almost all costs (groceries and “eggs”) down, virtually NO INFLATION, Tariff Money Pouring Into the U.S. — THE EXACT OPPOSITE OF “TOO LATE!” ENJOY!"

The President’s critique comes in the wake of the Federal Reserve’s decision to maintain steady interest rates. The central bank also noted a rise in the risks of higher inflation and unemployment, further obscuring the economic forecast as it continues to deal with the effects of Trump administration’s tariff policies.

In a press conference yesterday, Powell addressed these concerns, stating that despite the uncertainty, the economy is still in a solid position. He noted that the labor market is at or near maximum employment, and inflation has decreased significantly.

However, Powell acknowledged the risks of higher unemployment and inflation have risen due to unusual swings in trade complicating GDP measurement. He maintained that labor-market conditions have remained solid, with wage growth continuing to moderate. Indicators suggest that the labor market is broadly in balance, but near-term inflation expectations have moved up.

Powell also highlighted that surveys suggest tariffs are driving inflation expectations, even though most longer-term measures are consistent with a 2% goal. He expressed that the inflationary effects of policies could be short-lived and that the Federal Reserve is obligated to keep inflation expectations anchored.

In the face of these challenges, Powell indicated that the Federal Reserve might find its dual mandate goals in tension. However, for the time being, the Federal Reserve is well positioned to wait for clarity. Powell reassured that the policy rate is in a good place and that the economy is still growing at a solid pace, excluding distortions.

Despite the President’s recent commentary, Powell stated that it doesn’t affect the Federal Reserve’s job at all.