Former US President Donald Trump has launched a scathing attack on Federal Reserve Chair Jerome Powell, accusing him of making politically motivated decisions on interest rates ahead of the 2024 election.
In a fiery statement, Trump suggested Powell may lower rates to boost President Biden's re-election chances, warning that such a move could trigger an economic catastrophe. "He's going to do something to probably help the Democrats, I think, if he lowers interest rates," Trump declared.
Trump's Economic Warning
The Republican presidential candidate claimed that cutting rates before the election would lead to soaring inflation, drawing parallels to economic turmoil in countries like Argentina and Turkey. "It looks to me like he's trying to lower interest rates for the sake of maybe getting people elected," Trump added.
Market Reactions and Analysis
Financial experts remain divided on Trump's claims. Some economists argue the Fed maintains strict independence, while others note the unusual timing of potential rate cuts during an election year. The Federal Reserve has kept rates at a 23-year high between 5.25% and 5.5% since last summer.
Historical Context
Trump's relationship with Powell has been contentious since he appointed him in 2018. The former president previously criticised Powell for not cutting rates quickly enough during his administration, even suggesting the Fed chair should be fired.
As the election approaches, Trump's latest comments add fuel to ongoing debates about the Fed's independence and the politicisation of economic policy.
