Trump Blasts Powell Over $600 Billion Debt Cost

US President Donald Trump has once again criticized Federal Reserve Chair Jerome Powell, this time calling him a “numbskull” and claiming that the lack of rate cuts is costing the US $600 billion a year in short-term debt payments. Trump made these remarks at a bill signing ceremony on Thursday, asserting that if Powell lowered the federal funds rate by 2 percentage points, the government would save significantly.

In May, the Federal Open Market Committee (FOMC) announced that it would maintain the target range for the federal funds rate at 4.25-4.5%, stating that this level was most suitable for achieving both maximum employment and controlled inflation. The Fed has kept interest rates steady since December, when it cut the rate by 0.25%.

Trump, however, has been vocal about his dissatisfaction with Powell’s decisions. He stated, “We’re going to spend $600 billion a year – $600 billion – because of one numbskull that sits there [and says] ‘I don’t see enough reason to cut the rates now.’ And the problem he’s got, and I explained to him… cut your rates now, there’s no inflation. We got it down, we got prices down.”

Inflation rose by 2.4% in May, slightly less than the 2.5% increase predicted by economists. Powell met with Trump last month following a series of insults from the president. The Fed noted in a statement following the meeting that Powell did not discuss interest rate expectations with the president. The statement emphasized that the Fed would set monetary policy based on careful, objective, and non-political analysis to support maximum employment and stable prices.

Trump has repeatedly criticized Powell for not slashing interest rates, comparing the Fed chair to a wall and giving him the nickname “Too Late” Powell. He has also pointed out that other central banks, such as the Bank of England and China, have cut rates, while the Fed has not. Trump believes that the Fed’s inaction is a shame and that it is ridiculous, but he also acknowledges that the US economy is strong enough to withstand the Fed’s decisions.