Former President Trump Criticizes Federal Reserve Chair Powell as ’Mr. Too Late,’ Disputes Inflation Concerns

In a recent statement, former President Donald Trump lambasted Federal Reserve Chair Jerome Powell, dubbing him ’Mr. Too Late’ for his perceived delays in monetary policy adjustments. Trump further contended that current economic conditions show ’virtually no inflation,’ challenging mainstream economic assessments. His remarks come amid ongoing debates over inflation trends and the Fed’s response strategies.

Polymarket users predict that the Fed will keep rates unchanged

Polymarket users now think there is a 90% chance that the Fed will keep rates at 4.5% at its meeting in May. This is up from 62% a week ago.

Also, CME Group says buyers have an 85% chance that rates will stay the same in May. Since Powell’s comments, the chances of a May rate cut have gone down. That’s why the Fed will keep rates high until there are signs that inflation is going down.

On the other hand, Powell doesn’t care much about economic growth. Instead, his concern is inflation. He made it clear that the US central bank will not be in a hurry to respond to the large-scale tariffs put in place by the Trump administration or to the chaos in the financial markets that have followed due to fears of a global economic slowdown.

The markets crash as Trump shows panic

Trump’s comments affected the stock markets, which were already going down sharply on Monday, but Trump’s post sent them even further, with the broad S&P 500 stock index down 2% in early trading. Now, the S&P has lost $750 billion in market cap. 

In addition, Trump’s threats against Powell and his plans to raise tariffs have weakened the dollar, and the interest rate on 10-year Treasuries has gone up. On Monday, it went up by a small amount to 4.35%. Those rates set the standard for mortgage rates, meaning that the cost of getting money to buy a house will likely stay high.

“Europe has already “lowered” seven times.”- Trump points Powell to EU

As Trump told Powell to lower the rates, he pointed to Europe, which has already cut its interest rates seven times. However, the ECB raised its rates sharply to fight inflation from 2022 to 2023, so it has been lowering them slowly.

In fact, in the last three months of 2024, the economies of the 20 countries that use the euro grew by a small 0.2%. In March, inflation was 2.2%, close to the bank’s goal of 2%. Therefore, economic growth is now more important

At a meeting in Frankfurt, the bank’s rate-setting council agreed to pull the benchmark rate down by 0.25% to 2.25% to counter economic growth worries caused by Trump.  

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