Federal Reserve urged again by Trump following robust April employment data
Fired-Up Trump Pushes for lower Interest Rates on Social Media
In a typical Trump display, President Donald Trump took to his Truth Social platform on Friday to fan the flames, urging for a reduction in interest rates following a strong jobs report for April.
"Here we go again, just getting started!!!" Trump exclaimed in a jubilant post mere minutes after the nonfarm payrolls data was released. The Bureau of Labor Statistics reported a seasonally adjusted increase of 177,000 jobs in April, surpassing the Dow Jones estimate of 133,000 and although it fell slightly below the revised job growth of 185,000 in March.
This latest push from Trump signals his continued attempts to sway the central bank's decision-making process, testing its traditionally independent stance from the executive branch. Yet, his aggressive stance seems to have softened marginally as he scales back his criticism of Fed Chair Jerome Powell.
Trump's disapproval of Powell's performance and his constant pressure to decrease rates were once feared to jeopardize Powell's job. Economic advisor Kevin Hassett revealed last month that the White House was considering rules that would allow Trump to dismiss Powell. However, Powell has consistently maintained that the president does not have the authority to terminate his term that ends in May 2026.
Fears of Trump attempting to replace Powell with someone more amiable to political pressure on rates have been a cause of concern for markets worldwide, leadings a sell-off in April that saw significant drops in major indexes and the US dollar.
Since then, Trump has distanced himself from the idea of terminating Powell, stating he has "no intention" of firing him. At a rally in Michigan on Tuesday, he was careful to not openly criticize Powell by name, instead voicing his dissatisfaction with "a Fed person who is not really doing a good job."
Trump's Friday morning message stood in stark contrast to his reaction to Wednesday's report that the US economy contracted for the first time since 2022, with him blaming former President Joe Biden for the unfavorable first-quarter GDP reading.
Insights:
The historical episodes of presidents attempting to exert control over the Federal Reserve, such as Nixon's pressure on Arthur Burns, have demonstrated an increase in inflation and economic instability. The perception of political interference may also lead to decreased market confidence and increased market volatility. The independence of the Fed plays a vital role in maintaining long-term economic health and stability.
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Since the beginning of this year, the Fed remains a top focus for investors and market observers. To learn more about the Fed and its role in the economy, check out our resource on the Federal Reserve System.
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CNBC's Jeff Cox contributed to this report.
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