Looks like President Donald Trump is not the only one calling for Federal Reserve Chairman Jerome Powell to lower interest rates.
Indeed, now director of the Federal Housing Finance Agency (FHFA) – William Pulte – is calling for lowered interest rates.
According to a report from The Hill, Pulte believes that the time is now for the central bank to resume its interest rate cuts.
“Jay Powell needs to lower interest rates – enough is enough. President Trump has crushed Biden’s inflation, and there is no reason not to lower rates. The housing market would be in much better shape if Chairman Powell does this,” Pulte asserted.
The housing market is in rather dire straits throughout most of the United States.
After all, borrowing costs are vastly larger than average, which means that demand for housing will become increasingly smaller than average.
Naturally, Trump himself has led the demands for lowered interest rates, making his irritation with Powell quite clear.
“This would be a perfect time for Fed Chairman Jerome Powell to cut interest rates. He is always ‘late,’ but he could now change his image, and quickly … Cut interest rates, Jerome, and stop playing politics,” Trump proclaimed.
As of now, Powell is not inclined to cut interest rates.
“We may be entering a period of more frequent, and potentially more persistent, supply shocks – a difficult challenge for the economy and for central banks,” Powell recently warned.
In addition, Powell himself has primarily replied to the demands to cut interest rates in a distinctly irritable manner.
Powell’s irritation was especially clear during a recent Princeton University speech, in which he obliquely criticized Trump while directly identifying the Federal Reserve as “a key first responder.”
“With little warning, economies around the world came to a hard stop …The possibility of a long, severe, global depression was staring us in the face. Everyone turned to the government, and to the Federal Reserve in particular as a key first responder,” Powell declared.
Fairly grim choice of words, and borderline theatrical with phrases such as “staring us in the face.”
It is safe to say Powell is not shy about sharing his economic opinions, that is for certain.
Powell was also sure to praise “career civil servants” in his speech.
“Career civil servants at the Fed who are veterans of previous crises stepped forward and said, ‘We got this,’” Powell continued.
Apparently, Trump and his closest associates believe they “got this” as well, which is precisely why they have repeatedly called for Powell to lower the federal interest rate.
Will he or won’t he? And, perhaps more importantly, what would the consequences be in either scenario?
For now, the Supreme Court has signaled that Powell cannot be fired by Trump, despite upholding the firings of members from two independent U.S. labor boards.
“The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States,” the Supreme Court noted in its decision.
Nonetheless, it is difficult to tell what the future holds.
Author: Ofelia Thornton
