President Trump and Federal Reserve Chairman Jerome Powell are on a collision course over the central bank’s reluctance to cut interest rates aggressively. The tension is likely to unsettle financial markets, experts say.
The disagreement centers around the Fed’s willingness to reduce interest rates to stimulate economic growth. Mr. Trump has long pushed for lower interest rates, arguing that they would boost job creation and economic prosperity. However, Mr. Powell and the Federal Reserve have been hesitant to lower rates due to concerns about inflation and market volatility.
As tensions between the two leaders escalate, financial markets are bracing for potential disruption. “A fight between President Trump and Fed Chair Powell looks inevitable,” says Greg Valliere, a senior analyst at AGF Investment. “This could unnerve the markets and have significant implications for the economy.”
The dispute highlights the deepening divide between Mr. Trump’s economic vision and that of the Federal Reserve. While Mr. Trump sees lower interest rates as a key to revitalizing the US economy, Mr. Powell is more cautious, fearing that aggressive rate cuts could lead to inflation and asset bubbles.
The stakes are high, with markets already experiencing increased volatility in recent weeks. As the situation unfolds, investors will be watching closely for any signs of escalation or resolution between Mr. Trump and Mr. Powell.
Source: https://edition.cnn.com/2025/01/29/business/video/trump-federal-reserve-jerome-powell-digvid