Trump accuses Fed chairman of keeping interest rates ‘artificially high’

Donald Trump has accused Jerome Powell of keeping interest rates “artificially high” as he described the chairman of the Federal Reserve as a “bad person”.

In a fresh assault on Mr Powell, the US president blamed the Fed for burdening the American government with high borrowing costs after keeping rates unchanged at 4.5pc since December.

“We should be at 1pc or 2pc,” Mr Trump said in an interview with Fox News, as he said he was looking forward to “getting somebody into the Fed who is going to be able to lower the rates”.

He also claimed that the US economy remains strong despite Mr Powell keeping the rates “artificially high”.

It comes amid mounting speculation that Mr Trump is plotting to undermine Mr Powell by naming his successor early.

Mr Powell’s term as Fed chairman is scheduled to end in 11 months, and a successor is usually announced three to four months in advance to allow for a smooth transition.

However, it is thought that by naming a successor earlier, Mr Trump’s choice could influence the market by unveiling plans for more aggressive rate cuts.

When asked about who the next Fed chairman will be, Mr Trump pledged to appoint “anybody but Powell”.

“He’s a bad person,” he added.

Mr Powell was appointed to the senior job at the Fed by Mr Trump during his first term in office. Joe Biden gave him a second term, which will expire in May 2026.

The Fed sets monetary policy “to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates” – typically regarded as keeping inflation at around 2pc while seeking to keep the economy growing and the jobs market strong.

In the pandemic, the Fed cut interest rates to 0.25pc, only raising them in 2022 as the cost of living crisis took hold.
Rates reached a peak of 5.5pc in 2023.

Mr Powell indicated to Congress last week that interest rates would be likely to remain on hold at the next Federal Open Market Committee meeting in July as policymakers try to unpick the impact of Mr Trump’s trade war.

Mr Trump also said in his interview with Fox that he had “found a buyer for TikTok”, referring to the US operations of the Chinese social media app.

This follows threats by the American government to ban the app if TikTok fails to sell its US division.

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