White House National Economic Council director Kevin Hassett discusses the U.S. economys 3% growth in the second quarter and the Federal Reserve leaving interest rates unchanged on The Evening Edit.
President Donald Trump on Thursday slammed Federal Reserve Chair Jerome Powell after the central bank left interest rates unchanged on Wednesday despite the president’s repeated calls for a rate cut.
Trump took to his Truth Social platform to blast Powell, whom he appointed as Fed chair in 2017 but has repeatedly criticized his leadership of the Federal Reserve in the years since.
« Jerome ‘Too Late’ Powell has done it again!!! He is TOO LATE, and actually, TOO ANGRY, TOO STUPID, & TOO POLITICAL, to have the job of Fed Chair. He is costing our Country TRILLIONS OF DOLLARS, in addition to one of the most incompetent, or corrupt, renovations of a building(s) in the history of construction! Put another way, ‘Too Late’ is a TOTAL LOSER, and our Country is paying the price! »
The Fed on Wednesday held its benchmark interest rate steady for the fifth consecutive meeting, citing uncertainty over the impact of tariffs on inflation and consumer prices as well as conditions in the labor market.
FEDERAL RESERVE HOLDS KEY INTEREST RATE STEADY FOR FIFTH STRAIGHT MEETING DESPITE TRUMP’S PRESSURE
President Donald Trump has repeatedly criticized Federal Reserve Chair Jerome Powell in an effort to pressure the central bank into cutting interest rates. (Getty Images / Getty Images)
Chair Powell said at the post-announcement press conference that while inflation remains above the Fed’s 2% longer-run goal, the labor market is at roughly full employment, leaving the central bank in a good position to cut rates if economic conditions deteriorate.
He also noted that tariffs appear to be increasing consumer prices and pushing inflation data higher, though it’s unclear what the long-term impact on the economy will be.
« Higher tariffs have begun to show through more clearly to prices of some goods, but their overall effects on economic activity and inflation remain to be seen, » Powell said. He went on to explain that tariffs could lead to a one-time price hike, or they could lead to more persistent inflation that the Fed has to assess and manage.
SEE IT: THE PRICEY FEDERAL RESERVE RENOVATION PROJECT AT CENTER OF CONTROVERSY
President Donald Trump became the fourth president to visit the Federal Reserve, meeting with Chair Jerome Powell on a tour of the Fed’s under-renovation HQ, which Trump and his allies have criticized for cost overruns. (REUTERS/Kent Nishimura / Reuters)
Ahead of the Fed’s announcement on Wednesday, Trump touted the economy’s 3% growth in the second quarter, writing on Truth Social that it was « WAY BETTER THAN EXPECTED! » and added that, « ‘Too Late’ MUST NOW LOWER THE RATE. No Inflation! Let people buy, and refinance, their homes! »
With the Fed pausing this despite Trump’s pressure and central bank policymakers not scheduled to meet again until mid-September, the president will have to continue to wait for his sought-after interest rate cut – though the latest inflation data appears to have made a September cut less likely in the eyes of the market.
The Commerce Department on Thursday released its personal consumption expenditures (PCE) index for June, which showed consumer prices rose 2.6% compared with a year ago – up from 2.3% last month. Core PCE, which excludes volatile food and energy prices, rose from 2.7% to 2.8% on an annual basis.
FED’S FAVORED INFLATION GAUGE SHOWS CONSUMER PRICES ROSE AGAIN IN JUNE
Those figures are trending further away from the Fed’s 2% target for longer-run inflation, and following the PCE print the market views the chances of a Fed rate cut in September as less likely than it was previously.
The CME FedWatch’s tool showed the probability of a 25-basis-point rate cut in September as having declined from 58.4% a week ago and 46.7% yesterday after the Fed’s decision to 39.2% on Thursday following the release of the new inflation data.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
The tool also shows that the chance of the Fed leaving interest rates at the current target range of 4.25% to 4.5% has risen to 60.8% – up from 39.2% a week ago and 52.4% yesterday.
