What does Trump do chickens to Jerome Powell?
The president of the United States, Donald Trump, wants the president of the Federal Reserve, Jerome Powell, to reduce interest rates. Trumps cites that there is “virtualy without inflation” and the cost of energy is decreasing. Trump warned that the economy of the United States could be if interest rates are not immediately reduced. He has also shared with Europe by stating that he had reduced rates seven times.
The European Central Bank (ECB) has reduced its refinancing rates of 4.5 percent to 2.4 percent. The interest rate of the United States Federal Reserve has decreased from the range or 5.25-5.5 percent to 4.25-4.5 percent.
What is Powell’s position?
Jerome Powell has clearly said that the United States Central Bank will act independently without any political influence and will focus on its double mandate, which is to maximize employment and stable prices.
In his recent meeting in March, Powell, Conerns raised about the increase in inflation in the first two months of this year. The Fed had raised its inflation prognosis by 2025 to 2.8 percent of 2.5 percent projected above. Hello, he also said that the rate and non -notariff inflation will have to be resolved.
So, unless the Fed obtains clarity on the real impact of tariffs on inflation, it may not be in a hurry to reduce rates immediately.
Why is the dollar weaving due to this?
The interest rates of a country are one of the main drivers of its currency. Greater interest (compared to other countries): the differential-exiting interest rate will be the currency and vice versa. Since Trump insists on lower interest rates, the dollar dares. In addition, Trump threatening to say goodbye to Jerome Powell is making investors lose confidence.
This, together with uncertainty in tariffs, has reduced the safe state of the dollar and the market is now changing to other safe assets such as gold and yen.
In the future, what will be the probable result of this in the US dollar?
For now, the dollar is likely to remain weak. As indicated at its March meeting, we will have to wait for the Fed to come clearly on the real impact of the rate on inflation. We can know that only in June when the Fed releases its next economic prognosis. Until then, the dollar is likely to remain moderate.
Going through the lists, technical, the dollar index that is currently at 98.35 has space to test 96. It will be important to see if it manages to recover from there or not.
What does the law about President Trump say saying the president of the Fed of the United States?
According to the law, the president of the United States can fire any commissioner only in the following cases: inefficiency, negligence or duty or embezzlement (irregularities). So, unless Powell is accused and tested in any of the three scenarios mentioned above, Trump cannot fire Powell.
The mandate of Jerome Powell is only finishing in May 2026.
Posted on April 22, 2025
