Latest news with #Fed
Mint
17 minutes ago
- Business
- Mint
‘Dumbest': Donald Trump alleges Jerome Powell costing US hundreds of billions as Fed keeps rates steady
Donald Trump on Thursday called Federal Reserve Chairperson one of the 'most destructive' people in the US government who is costing the country billions of dollars. In a series of posts on Truth Social after the Fed's decision of not cutting interest rates once more, Trump called the central bank boss 'Too Late Jerome Powell', labelling him as an 'American Disgrace'. ''Too Late' Jerome Powell is costing our Country Hundreds of Billions of Dollars. He is truly one of the dumbest, and most destructive, people in Government, and the Fed Board is complicit. Europe has had 10 cuts, we have had none,' he said. 'We should be 2.5 Points lower, and save $BILLIONS on all of Biden's Short Term Debt. We have LOW inflation! TOO LATE's an American Disgrace!,' Trump added. In line with market expectations, the US Federal Reserve on Wednesday decided to keep the federal funds rate unchanged at 4.25-4.50 per cent. Shortly before the FED's decision, Donald Trump claimed that Jerome Powell is costing Americal billions of dollars, calling him the 'WORST'. 'Too Late—Powell is the WORST. A real dummy, who's costing America $Billions!' he said. Speaking to reporters at the White House, Trump said that the man he put in the role during his last term had done a poor job. He also mused about appointing himself to lead the US central bank, based on his dissatisfaction with Powell. 'Maybe I should go to the Fed,' Trump said. 'Am I allowed to appoint myself at the Fed? I'd do a much better job than these people.' The Federal Reserve on Wednesday decided to keep its interest rates unchanged at 4.25-4.50 per cent, in line with economists' expectations. Donald Trump has long criticised Fed chairperson Jerome Powell and has made it clear he will not retain him once is term ends in about nine months. Powell, however, dismissed reporters' questions about the messages from the White House. 'We think we're in a good place,' he said, when asked about Trump's remarks, adding, 'That is what matters to us.' He also told reporters that the central bank would make better decisions if it waited a few months to understand how tariffs impact inflation, spending and hiring, in a sign that the next rate adjustment could take some time to materialise.
Time of India
18 minutes ago
- Business
- Time of India
Peter Schiff sounds alarm: America faces economic doom as Fed powerless against hyperinflation threat
Peter Schiff Sounds the Alarm on the US Economy Fed Leaves Rates Unchanged Again Inflation and Weak Economy Ahead? Live Events Peter Schiff Predicts Higher Inflation and a Sluggish Economy FAQs (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel Economist Peter Schiff has issued a stark warning about the US economy and criticised the Federal Reserve's decision to keep its benchmark federal funds rate unchanged at a current range of 4.25% to 4.5%, as per a Fox Business' "The Claman Countdown", Schiff told host Liz Claman that the "biggest takeaway is that Powell basically admitted that they have no idea what's going to happen," quoted Fox Business. He said, "They don't really know what's going to happen to consumer prices. They don't know what's going to happen to employment," and added, "I don't even think their forecasts are educated guesses so much as wishful thinking," as quoted in the READ: Trump's big headache? U.S faces mounting risk to 40,000 troops in Middle East as Iran threatens response His remark came after the Federal Open Markets Committee (FOMC) kept the central bank's benchmark interest rate at its current level and also released a summary of economic projections, which is also known as the "dot plot," reported Fox Business. This showed that the members expect two Fed interest rate cuts in 2025, followed by one cut each in 2026 and 2027, as per the FOMC also forecasted that PCE inflation will increase to 3% this year and then fall to 2.4% in 2026 and 2.1% in the following year, as per Fox Business reported. While the real GDP is projected to contract to 1.4% in 2025 before growth picks up to 1.6% in 2026 and 1.8% in 2027, according to the report. FOMC also expected that unemployment would increase to 4.5% in 2025 and 2026, before falling to 4.4% in 2027, as per the who is the chief economist at Euro Pacific Asset Management, said that he thought inflation will be "a lot higher" than the Fed expects and that the US economy will be "a lot weaker," as quoted by Fox Business. He also said that the "big problem" for inflation is "all of the inflation chickens that the Fed has been releasing for more than a decade are coming home to roost," as quoted by Fox went on to predict that the United States will experience stagflation "with a recession and much higher inflation happening at the same time, really complicating the defense ability to try to do something about either problem," as quoted in the report. The economist also warned that America is on the path to "runaway inflation" that could become " hyperinflation ," quoted Fox explained that lower interest rates will not help the US economy, and even said that it was the "cause," as per the suggested that, "The solution involves much higher interest rates," adding, "Now, I understand that's going to be very painful, given the economy that we've created, built on a foundation of cheap money," quoted Fox economist pointed out that "It means stock prices come down, real estate prices go down, companies fail," adding, "There's going to be bankruptcies. There is going to be defaults. There's going to be a protracted recession, probably a much worse financial crisis than 2008, but all that has to happen because the alternative to that is even worse," as quoted in the criticised the Fed for keeping interest rates unchanged and said they are relying on "wishful thinking," as per Fox Business expects inflation to be much higher than the Fed is forecasting.
Miami Herald
19 minutes ago
- Business
- Miami Herald
The Federal Reserve has bigger problem on its hands than tariffs
To cut, or not to cut. That's the multi-trillion-dollar question. So far, the Federal Reserve has taken a conservative stance, holding interest rates steady while it awaits more clarity into the jobs market and inflation's path in the wake of newly enacted tariffs. Fed chair Powell's willingness to remain on the sidelines has drawn significant blowback from President Donald Trump, who regularly criticizes Powell for holding rates steady rather than cutting them. Related: Fed interest rate cut decision resets forecasts for the rest of this year However, many believe that Powell's patience is the right policy, given massive uncertainty surrounding how tariffs may impact prices on everything from clothing to cars later this year. The decision to raise or cut rates may not be as simple as figuring out how tariffs play out, though. Inflation may or may not spike because of them (that remains unclear), but a recent development could force the Fed's hands, forcing it to make a decision on interest rates sooner than it wants. Bloomberg/Getty Images President Trump's disdain for Fed Chair Powell is pretty clear. So far, he's referred to the pragmatic Powell as "Mr Too-Late," a shot at Powell's mistaken hesitancy to raise rates in 2021 and early 2022 to quell inflation, and a "numbskull" for not cutting interest rates yet this year. Many expected that the Fed would be far friendlier to borrowers in 2025, given it reduced interest rates three times late last year, lowering the Fed Funds Rate by 1%. Related: Billionaire fund manager sends strong message on Fed Chair Powell's future The moves last year provided some relief to borrowers, particularly home buyers reeling from high mortgage rates. Many thought that ongoing cracks in employment, including rising layoffs, would mean more cuts this year. That optimism was quickly dashed after Trump took office in January, promising to spark a return to US manufacturing by increasing tariffs. And increase them, he did. In February, he slapped 25% tariffs on Canada and Mexico and 20% tariffs on China. Then, he upped the ante with a 10% baseline tariff on imports in April, plus 25% tariffs on autos, and, after a tariff tit-for-tat, 30% tariffs on China. The news has sent shockwaves through markets and retailers, many of which pulled forward imports to get in front of tariffs, are warning that prices will increase once that inventory has been sold. The risk of higher prices has trapped the Fed. Its dual mandate is to lower prices and unemployment. Unfortunately, that's easier said than done. Raising rates lowers inflation but increases unemployment. The opposite is true when you cut rates. Uncertain over what tent pole it should concentrate on, the Fed has chosen a wait-and-see approach even as layoffs climb. Over 696,000 workers have been laid off this year through May, according to Challenger, Gray, & Christmas, up 80% year over year. While tariffs' impact on inflation receives most of the attention, the recent war in the Middle East may determine the Fed's next move. Related: Bank of America unveils surprising Fed interest rate forecast for 2026 Israel's attack and Iran's response have raised significant concerns that global oil markets could suffer a shock if the conflict spills over, impacting oil tankers traveling through the Strait of Hormuz. The Strait of Hormuz sees traffic of 18 million to 19 million barrels of oil daily, representing 20% of global oil consumption, including crude, condensates, and fuel. Its location off Iran means it could be a critical oil chokepoint if Iran decides to block it. It appears that possibility isn't off the table, despite the fact that it would significantly hurt Iran's oil exports, which are solely sea-borne. Closing the Strait is "under serious consideration," said Esmail Kosari, an Iranian parliament member and IRGC general, on June 15. The risk that the oil spigot through the Strait of Hormuz gets shut off has already caused a massive rally in crude oil prices. Brent crude and West Texas Intermediate crude oil have seen prices jump 22% and 26% this month, including an 11% increase each over the past five days amid new tensions with the United States. President Trump seemingly appeared to want to distance the US involvement in Israel's attacks on Iran early on, favoring negotiations. However, his stance seems to have pivoted, given he's called for Iran's unconditional surrender and left US involvement in destroying Iran's nuclear facilities as a possibility. More Federal Reserve: Fed interest rate cut decision resets forecasts for the rest of this yearFederal Reserve prepares strong message on long-term interest ratesFed official revamps interest-rate cut forecast for this year The full impact on gasoline prices in the US won't be immediately felt, but we are already seeing increases. According to the EIA, weekly gasoline prices were $3.14 per gallon nationwide on June 16, up from $3.11 on June 9. "National average price of gasoline has shot up to $3.19/gal this morning according to GasBuddy data, 7.2c higher than a week ago," wrote GasBuddy's Patrick DeHaan on X. "We'll likely climb to $3.25-$3.40/gal, wiping out a good portion of the [year over year] YoY drop." Energy, including fuels, services, and things like electricity, represents about 9.5% of the Consumer Price Index (CPI) inflation measure. Gasoline accounts for 3%, which may not sound like much, but can move the needle (which is why economists often consider inflation ex-fuel a better gauge because of oil price volatility). Over the past year, a drop in gasoline prices has helped keep inflation in check, with the BLS writing in its latest CPI report, "The energy index decreased 3.5 percent over the past 12 months. The gasoline index fell 12.0 percent over this 12-month span, and the fuel oil index fell 8.6 percent over the same period." If oil prices remain elevated (they normally rise in summer because of travel demand and the switchover to pricier summer grade gasoline, which contains less cheap butane because of smog restrictions), it could crimp retail spending and increase energy costs for manufacturers and shippers. That would pressure the $30.5 trillion US economy, potentially causing stagflation or recession. In those scenarios, the Fed may have little option but to cut rates to prevent a spike in unemployment. Related: Veteran fund manager who predicted April rally updates S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Business Recorder
an hour ago
- Business
- Business Recorder
European shares dive as Mideast tensions, US involvement fears weigh
European shares skidded to an over one-month low on Thursday as escalating Middle East tensions and fears over potential U.S. involvement rattled investors. The pan-European STOXX 600 closed down for the third consecutive day with a 0.8% drop to its lowest level since May 9. Trading volumes remained thin as U.S. markets were shut for a public holiday. The week-old Iran-Israel conflict showed no signs of de-escalation. Meanwhile, U.S. President Donald Trump kept markets guessing about American involvement in air strikes on Tehran. Markets were hopeful of talks between the U.S. and Iran, and between the European Union and Iran on Friday, leading to a potential de-escalation in tensions. Much of the recent nervousness has been in markets centred around crude oil supply shocks, triggered by tensions in the oil-rich Middle East. Oil prices rose on the day and boosted the energy sector by 0.8%, emerging as the session's top performer. Healthcare and utilities were the only other sectors in the green. Conversely, travel and leisure stocks led broader declines and finished 2.3% lower, taking a hit from the soaring oil prices. 'When the main channel is through energy prices, you see some risk aversion and that's what we're seeing across European equities and that explains the subdued performance,' said Lilian Chovin, head of asset allocation at Coutts, referring to the Middle East tensions. Unpredictable policies European central bank decisions this week showed how Trump's unpredictable trade policies are complicating monetary policy. The Bank of England kept rates on hold, as expected, but flagged risks from a weaker labour market and higher energy prices. Britain's FTSE 100, which houses energy giants such as BP and Shell, lost 0.6%. The Swiss National Bank cut rates to zero as expected, while Norway's central bank delivered a surprise 25 basis-point cut, its first reduction in five years. Stocks in Oslo were up 0.7%. The Euro STOXX Volatility index touched its highest level since May 23 and was at 24.94. Fed Chair Jerome Powell said on Wednesday that inflation in goods prices is expected to go up over the summer as Trump's tariffs work their way to consumers. The mixed signals did not offer markets much clarity on how the Fed plans to navigate the uncertain economic environment. EU officials are increasingly resigned to a 10% rate on 'reciprocal' tariffs being the baseline in any trade deal between the United States and the EU, five sources familiar with the negotiations said. 'We understand Trump's reaction function and the constraints that apply to him and so investors are better able to form forward-looking views compared to two months ago,' Chovin added. Shares in recruitment companies in Europe slid after British recruiter Hays' forecast a more than 57% drop in annual operating profit. Rival firms Randstad Robert Walters and Adecco fell over 4.5% each. Among stocks, Stora Enso jumped 14.7% to top the STOXX 600 after the Finnish forestry group said it was initiating a strategic review of its Swedish forest assets.
Time of India
2 hours ago
- Business
- Time of India
'Too late': Donald Trump slams Jerome Powell, calling him one of the 'dumbest and most destructive'; accuses Fed chief of costing US billions
US President once again slammed Federal Reserve Chairman Jerome Powell, accusing him of costing the country hundreds of billions of dollars after the central bank kept the interest rates unchanged. Tired of too many ads? go ad free now "Too Late," Trump tweeted, calling Powell one of the "dumbest" and most "destructive" people in government. "Too Late" Jerome Powell is costing our Country hundreds of billions of dollars. He is truly one of the dumbest, and most destructive, people in Government, and the Fed Board is complicit," Trump posted on Truth social. Trump expressed frustration after the Fed chose to keep interest rates unchanged, despite European countries implementing multiple rate cuts. He argued that the US should have already reduced rates by 2.5 points to save billions on short-term debt, highlighting the country's low inflation as justification for the cuts. "Europe has had 10 cuts, we have had none. We should be 2.5 Points lower, and save $BILLIONS on all of Biden's Short Term Debt. We have LOW inflation! TOO LATE's an American Disgrace!" Trump noted. He had earlier called Powell a 'real dummy' and claimed he was "costing America billions." Trump also shared an article in which an investor argued Powell should resign immediately if he failed to cut short-term interest rates, saying the Fed's slow actions were hurting the housing market and that inflation had dropped enough to justify a rate cut. The US Federal Reserve decided to keep its benchmark interest rate unchanged for the fourth straight meeting, sticking with a range between 4.25% and 4.50%. Fed Chair Jerome Powell said the central bank was in no rush to act and would monitor inflation trends and the impact of Trump's new tariffs over the summer. Tired of too many ads? go ad free now 'We'll make smarter and better decisions if we just wait a couple of months,' Powell said, suggesting a cautious stance given the mixed economic signals. The Fed also revised its outlook—cutting its 2025 growth forecast from 1.7% to 1.4%, and raising inflation expectations to 3% and the unemployment rate to 4.5%.From 'stupid' to 'worst ever.' Trump's criticism of Powell is not new. In the past, Trump has publicly attacked the Fed chairman, including calling him 'stupid' just before the rates were announced. Trump has suggested that cutting rates will lower the interest America pays on its debt—an argument critics say overlooks the inflationary risks of such moves. The Fed noted that Trump's sweeping 10% tariffs on major trading partners were likely to increase inflation and slow growth. Powell added that the full effects were still unclear and may not be visible for several months. "Because the economy is still solid, we can take the time to actually see what's going to happen," he said.
