Trump Calls on the Federal Reserve Board to Take Full Control of the Central Bank from Powell
Posting on his Truth Social platform, Trump called Powell 'stubborn.' The Fed chair has been subjected to vicious verbal attacks by the Republican president over several months.
The Fed has the responsibility of stabilizing prices and maximizing employment. Powell has held its benchmark rate for overnight loans constant this year, saying that Fed officials needed to see what impact Trump's massive tariffs had on inflation.
If Powell doesn't 'substantially' lower rates, Trump posted, 'THE BOARD SHOULD ASSUME CONTROL, AND DO WHAT EVERYONE KNOWS HAS TO BE DONE!'
Two of the seven Fed governors, Christopher Waller and Michelle Bowman, issued statements Friday saying they see the tariffs as having a one-time impact on prices and the job market as most likely softening. As a result, the two dissented at the Fed meeting on Wednesday and pushed for slight rate cuts relative to what Trump was seeking.
Even though Trump, who nominated Waller and Bowman, has claimed the U.S. economy is booming, he welcomed their arguments and what he called their strong dissents.
After the Fed announced later Friday that governor Adriana Kugler will step down next week, Trump said Powell should follow her lead and leave, too.
'She knew he was doing the wrong thing on Interest Rates. He should resign, also!' Trump said on social media.
Friday's jobs report showed a rapidly decelerating economy, as just 73,000 jobs were added in July and downward revisions brought down the June and May totals to 14,000 and 19,000, respectively.
Trump sees the rate cuts as leading to stronger growth and lower debt servicing costs for the federal government and homebuyers. The president argues there is virtually no inflation, even though the Fed's preferred measure is running at an annual rate of 2.6%, slightly higher than the Fed's 2% target.
Trump has called for slashing the Fed's benchmark rate by 3 percentage points, bringing it down dramatically from its current average of 4.33%. The risk is that a rate cut that large could cause more money to come into the economy than can be absorbed, possibly causing inflation to accelerate.
The Supreme Court suggested in a May ruling that Trump could not remove Powell for policy disagreements. This led the White House to investigate whether the Fed chair could be fired for cause because of the cost overruns in the Fed's $2.5 billion renovation projects.
Powell's term as chair ends in May 2026, at which point Trump can put his Senate-confirmed pick in the seat.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yomiuri Shimbun
an hour ago
- Yomiuri Shimbun
Trump Again Threatens India with Harsh Tariffs over Russian Oil Purchases
WASHINGTON, Aug 4 (Reuters) – U.S. President Donald Trump again threatened on Monday to raise tariffs on goods from India over its Russian oil purchases, while New Delhi called his attack 'unjustified' and vowed to protect its economic interests, deepening the trade rift between the two countries. In a social media post, Trump wrote, 'India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits. They don't care how many people in Ukraine are being killed by the Russian War Machine.' 'Because of this, I will be substantially raising the Tariff paid by India to the USA,' he added. A spokesperson for India's foreign ministry said in response that India will 'take all necessary measures to safeguard its national interests and economic security.' 'The targeting of India is unjustified and unreasonable,' the spokesperson added. Trump has said that from Friday he will impose new sanctions on Russia as well as on countries that buy its energy exports, unless Moscow takes steps to end its 3-1/2 year war with Ukraine. Russian President Vladimir Putin has shown no public sign of altering his stance despite the deadline. Over the weekend, two Indian government sources told Reuters that India will keep purchasing oil from Russia despite Trump's threats. India has faced pressure from the West to distance itself from Moscow since Russia invaded Ukraine in early 2022. New Delhi has resisted, citing its longstanding ties with Russia and economic needs. Trump had already in July announced 25% tariffs on Indian imports, and U.S. officials have cited a range of geopolitical issues standing in the way of a U.S.-India trade accord. Trump has also cast the wider BRICS group of developing nations as hostile to the United States. Those nations have dismissed his accusation, saying the group promotes the interests of its members and of developing countries at large. CRUDE BUYER India is the biggest buyer of seaborne crude from Russia, importing about 1.75 million barrels per day of Russian oil from January to June this year, up 1% from a year ago, according to data provided to Reuters by trade sources. India began importing oil from Russia because traditional supplies were diverted to Europe after the outbreak of the Ukraine conflict, the Indian spokesperson said, calling it a 'necessity compelled by global market situation.' The spokesperson also noted the West's, particularly the European Union's, bilateral trade with Russia: 'It is revealing that the very nations criticizing India are themselves indulging in trade with Russia.' Despite the Indian government's defiance, the country's main refiners paused buying Russian oil last week, sources told Reuters. Discounts to other suppliers narrowed after Trump threatened hefty tariffs on countries that make any such purchases. Indian government officials denied any policy change. The country's largest refiner, Indian Oil Corp, has bought 7 million barrels of crude from the United States, Canada and the Middle East, four trade sources told Reuters on Monday. India also has been frustrated by Trump repeatedly taking credit for an India-Pakistan ceasefire that he announced on social media in May, which halted days of hostilities between the nuclear-armed neighbors. The unpredictability of the Trump administration creates a challenge for Delhi, said Richard Rossow, head of the India program at Washington's Center for Strategic and International Studies. 'India's continued energy and defense purchases from Russia presents a larger challenge, where India does not feel it can predict how the Trump administration will approach Russia from month to month,' he said.
Yomiuri Shimbun
2 hours ago
- Yomiuri Shimbun
France and Saudis Vow to Keep up Momentum for ‘Two-State Solution' to Israel-Palestinian Conflict
UNITED NATIONS (AP) — After decades of inaction and frozen negotiations, the issue of an independent Palestinian state living in peace with Israel returned to the spotlight at a high-level U.N. conference — and France and Saudi Arabia, which spearheaded the effort, are determined to keep up the momentum. But hurdles for a two-state solution that would see Israel living side-by-side with an independent Palestine are very high. War in Gaza — a crucial part of a hoped-for Palestinian state — drags on with escalating violence in the West Bank, the other main component. And Israel's Prime Minister Benjamin Netanyahu and his right-wing government vehemently oppose an independent Palestinian state, which the Israeli leader says would be a reward for terrorism after Hamas' Oct. 7, 2023, attacks against his country. Nonetheless, after eight decades of conflict between Israel and Palestinians, pressure is growing for a two-state solution, as last week's high-level U.N. conference co-chaired by France and Saudi Arabia demonstrated — even if it was boycotted by Israel and its close ally, the United States. The conference illustrated that many believe a political solution is possible The French U.N. ambassador, Jerome Bonnafont, conceded in an Associated Press interview that without a Gaza ceasefire and massive humanitarian aid for over 2 million Palestinians sliding toward famine, 'it will be extremely difficult to move forward to define a new way of administering Gaza as part of Palestine' – and he said these are priority issues. But the conference demonstrated that a majority of the U.N.'s 193 member nations are 'convinced that there is a possibility of a political solution,' he said, and that is 'what its follow-up will continue to promote.' About 160 of the U.N.'s 193 member nations participated, 125 spoke in support of a two-state solution (forcing the meeting into an unexpected third day), and between 40 and 50 were represented by a government minister. An independent state of Palestine is recognized by over 145 countries, and the meeting sparked new pledges of recognition by three of the seven members of the powerful Group of Seven — France, United Kingdom and Canada — as well as Malta. A statement by seven others, including Australia, New Zealand, Finland and Portugal, expressed 'positive consideration' of following suit. French Foreign Minister Jean-Noel Barrot and Saudi Foreign Minister Prince Faisal bin Farham are determined not to let the spotlight fade. They are planning 'an event' during the annual gathering of world leaders at the General Assembly, which starts Sept. 23, when the new pledges are expected to be officially announced. The conference was notable for being co-chaired by an Arab and Western nation, and for setting up eight working groups with diverse chairs to make proposals on key issues for a two state solution — security for Israel and an independent Palestine, political reforms, legal problems, humanitarian assistance, economic development and Gaza reconstruction, to name some. The result was a seven-page 'New York Declaration.' The French and Saudi foreign ministers sent the declaration, with a lengthy annex of recommendations from the working groups, to all 193 U.N. members and asked them to endorse it by early September, before the world leaders' gathering. The declaration, which also was endorsed by the European Union and Arab League, urges Israel to commit to a Palestinian state, and urges further recognitions as 'an essential and indispensable component of the achievement of the two-state solution.' The declaration contains some stronger language For the first time, the Arab League's 22 member nations condemned 'the attacks committed by Hamas against civilians' in southern Israel on Oct. 7, and agree that 'Hamas must end its rule in Gaza and hand over its weapons to the Palestinian Authority.' It sets out a plan to then move to an independent, demilitarized Palestine, including deployment of a U.N. Security Council-mandated 'temporary international stabilization mission' supported by the Palestinian Authority. It would protect civilians, help build support for a Palestinian state and its security forces, and provide 'security guarantees for Palestine and Israel.' Richard Gowan, the International Crisis Group's U.N. director, gave French President Emmanuel Macron credit 'for raising the level of ambition for the conference,' and helping make it 'more symbolically significant than many diplomats expected.' The meeting gave weighty states including France, Britain and Canada the opportunity 'to signal their discontent with Israeli policy,' he said, and it gave Palestinians seeking a peaceful road to statehood 'some political ammunition.' Turkish Foreign Minister Hakan Fidan, who hosted a Hamas delegation in Istanbul last week to discuss Gaza's humanitarian crisis and stalled ceasefire talks, noted growing global support for the Palestinians and a Palestinian state — and Israel's increasing isolation. Bonnafont, the French ambassador, had messages for Israel's opponents and Israelis seeking more territory. 'We say to those who are hostile to Israel, the way to peace is certainly not to deny the right of existence to Israel. This is the way to perpetual war,' Bonnafont said. 'And the real way to defend the Palestinians is to give them a state, and the only way to give them a state is a two-state solution — and we have demonstrated concretely that this solution exists and is feasible.'
Yomiuri Shimbun
2 hours ago
- Yomiuri Shimbun
Dow Leaps 585 Points as US Stocks Win Back Most of Friday's Wipeout
NEW YORK (AP) — U.S. stocks rallied on Monday and won back most of their sharp loss from last week, when worries about how President Donald Trump's tariffs may be punishing the economy sent a shudder through Wall Street. The S&P 500 jumped 1.5% to follow up its worst day since May with its best since May. The Dow Jones Industrial Average climbed 585 points, or 1.3%, and the Nasdaq composite leaped 2%. Idexx Laboratories helped lead the way and soared 27.5% after the seller of veterinary instruments and other health care products reported a stronger profit for the spring than analysts expected. It also raised its forecast for profit over the full year. Tyson Foods likewise delivered a bigger-than-expected profit for the latest quarter, and the company behind the Jimmy Dean and Hillshire Farms brands rose 2.4%. They helped make up for a nearly 3% loss for Berkshire Hathaway after Warren Buffett's company reported a drop in profit for its latest quarter from a year earlier. The drop-off was due in part to the falling value of its investment in Kraft Heinz. The pressure is on U.S. companies to deliver bigger profits after their stock prices shot to record after record recently. The jump in stock prices from a low point in April raised criticism that the broad market had become too expensive. Stocks are coming off their worst week since May not so much because of that criticism but because of worries that Trump's tariffs may be hitting the U.S. economy following a longer wait than some economists had expected. Job growth slowed sharply last month, and the unemployment rate worsened to 4.2%. Trump reacted to Friday's disappointing jobs numbers by firing the person in charge of compiling them. He also continued his criticism of the Federal Reserve, which could lower interest rates in order to pump adrenaline into the economy. The Fed has instead been keeping rates steady this year, in part because lower rates can send inflation higher, and Trump's tariffs may be set to increase prices for U.S. households. Friday's stunningly weak jobs report did raise expectations on Wall Street that the Fed will cut interest rates at its next meeting in September. That caused Treasury yields to slump in the bond market, and they eased a bit more on Monday. The yield on the 10-year Treasury slipped to 4.19% from 4.23% late Friday. 'In our view, if the Fed starts to cut rates at its September meeting, we believe this would be supportive for markets,' according to David Lefkowitz, head of US equities at UBS Global Wealth Management. Such hopes, combined with profit reports from big U.S. companies that have largely come in better than expected, could help steady a U.S. stock market that may have been due for some turbulence. Before Friday, the S&P 500 had gone more than a month without a daily swing of 1%, either up or down. This upcoming week may feature fewer fireworks following last week's jobs report and profit updates from some of Wall Street's most influential companies. This week's highlights will likely include earnings reports from The Walt Disney Co., McDonald's and Caterpillar, along with updates on U.S. business activity. On Wall Street, American Eagle Outfitters jumped 23.6% after Trump weighed in on the debate surrounding the retailer's advertisements, which highlight actor Sydney Sweeney's great jeans. Some critics thought the reference to the blonde-haired and blue-eyed actor's 'great genes' may be extolling a narrow set of beauty standards. 'Go get 'em Sydney!' Trump said on his social media network. Wayfair climbed 12.7% after the retailer of furniture and home decor said accelerating growth helped it make more in profit and revenue during the spring than analysts expected. Tesla rose 2.2% after awarding CEO Elon Musk 96 million shares of restricted stock valued at approximately $29 billion. The move could remove potential worries that Musk may leave the company. CommScope soared 86.3% after reaching a deal to sell its connectivity and cable business to Amphenol for $10.5 billion in cash, while Amphenol rose 4.1%. They helped offset a 15.6% loss for On Semiconductor, which only matched analysts' expectations for profit in the latest quarter. The company, which sells to the auto and industrial industries, said it's beginning to see 'signs of stabilization' across its customers. All told, the S&P 500 rose 91.93 points to 6,329.94. The Dow Jones Industrial Average climbed 585.06 to 44,173.64, and the Nasdaq composite leaped 403.45 to 21,053.58. In stock markets abroad, indexes rose across much of Europe and Asia. South Korea's Kospi rose 0.9%, and France's CAC 40 climbed 1.1%, while Japan's Nikkei 225 was an outlier with a drop of 1.2%.
