If President Donald Trump isn’t pleased with the Federal Reserve’s recent interest rate calls, he should take a hard look at his own trade policies, Fed chair Jerome Powell suggested on Tuesday.
During an appearance at the European Central Bank forum in Sintra, Portugal, Powell was asked by Bloomberg Television’s Francine Lacqua if the Federal Reserve would have cut rates more without the impact of Trump’s tariffs on foreign goods. The Fed has kept rates steady since December.
“I do think that’s right,” Powell responded. “We went on hold when we saw the size of the tariffs, and essentially all inflation forecasts for the United States went up materially as a consequence of the tariffs.”
Batting away implicit critiques that the Fed acted rashly, Powell continued to say that “We didn’t overreact. In fact we didn’t react at all, we’re simply taking some time.”
Powell, who appeared alongside other central bankers, has faced persistent attacks from the president focused on his leadership atop the Federal Reserve. On Tuesday, Trump told reporters aboard Air Force One that “We have a moron at the head of the Fed. He’s a moron.”
Since selecting him to chair the Fed in 2018, Trump has lobbed a series of increasingly biting insults at Powell, mostly to critique economic policies he saw as insufficiently loose. During his first term, Trump said that Powell was like “a powerful golfer who can’t score” and repeatedly mused about firing him.
So far in his second term, Trump has upped the ante, calling Powell “terrible,” a “very average mentally person,” and “a very stupid person, actually.” If that wasn’t enough, Trump boasted that he had narrowed his list of potential successors to three or four people and sent him a Sharpie-written letter demanding lower rates.
“I’m very focused on just doing my job,” Powell said on Tuesday when asked about Trump’s barbs.
The chair’s comments at the ECB summit dovetail with the majority of economic handicappers, who responded to Trump’s tariffs by revising their inflation predictions upward. Goldman Sachs, for example, predicted that consumer prices would surge 3.7 percent by 2026, while former Fed Chair Janet Yellen predicted inflation rates of at least 3 percent. Notably, however, the Bureau of Labor Statistics reported that prices rose just 2.4 percent in May—less than economists expected.
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