Over the course of the past few weeks, it has become increasingly clear that the global economy is not doing particularly well, and the same goes for the economy in the United States. As it is well known, central banks across the world have been cutting interest rates quite aggressively in order to stimulate economies. The United States President Donald Trump has also demanded such an approach from the head of the United States Federal Reserve Jarome Powell. Although Powell has cut rates in July and did so again on Wednesday, the cuts were light, and that infuriated the President again.
Over the past few months, the President has consistently attacked Powell for his refusal to cut rates as deeply as he wanted and went on to blame him for the slowdown in the economy as well. It was widely expected that the Fed was going to, in fact, cut rates this week, and while it did so, it did not please the President. In a Tweet, Trump said, “Jay Powell and the Federal Reserve Fail. No ‘guts,’ no sense, no vision! A terrible communicator.”
After these recent incidents, many are now wondering whether this is a reaction to hide the weaknesses in the economy. However, this time Jerome Powell has not taken the whole thing lying and made statements that would further enrage Donald Trump. Many observers believe that Trump is trying to squarely lay the blame for all weaknesses in the economy on Powell’s and the Fed’s door. Powell has refused to take that sort of a blame game lying down.
The chief of the Fed stated that many weaknesses in the economy had been primarily caused by trade uncertainties. As everyone knows, this is a direct attack on the President and his long drawn out trade war with China that has definitely had a major effect on the economic drivers.