The President of the United States Central Bank (Fed) Jerome Powell once again considers Tuesday that it can “wait” before lowering its rates, despite the opposite opinion of other members and fierce pressures of Donald Trump.
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“For the moment, we are well placed to wait to know more about the probable evolution of the economy before considering any adjustment of our policy,” said Jerome Powell, according to the text of a discourse shared in advance by the monetary institution.
Mr. Powell will be auditioned from 10 a.m. (2 p.m. GMT) by the banking commission of the House of Representatives. He will do the same before the Senate banking committee on Wednesday.
In a message broadcast on the night of Monday to Tuesday, US President Donald Trump once again attacked him and the monetary policy of the federal reserve, which he deems too restrictive.
“Jerome Powell of the Fed will be at the congress today to explain, among other things, why he refuses to lower the rates,” wrote Mr. Trump on his social social platform.
“No inflation, a superb economy. We should be at least two or three points [de pourcentage] lower ”in terms of guiding rate, said the head of state.
The Fed guiding rates – which guide the costs of borrowing of individuals and businesses – are in a range between 4.25% and 4.50% since December.
Voices in favor of relaxation
Jerome Powell, whose mandate runs until the spring of 2026, had been propelled at the head of the federal reserve by Donald Trump himself during his first mandate.
The American president describes him in his last message as “beast” and “stubborn”, saying that the United States will pay “for his incompetence for many years to come”.
He also calls on the Council of Governors to “act” against Mr. Powell. On Friday, he asked other American central bankers to overthrow him.
“We are aware that our actions affect society, families, businesses across the country. All we do is in the name of our mission “which is to reach full employment as much as price stability, highlights Jerome Powell in his speech.
The customs duties implemented since the return to power of Donald Trump in January will “probably draw prices upwards and weigh on economic activity”, he notes.
Mr. Powell says he expects the PCE inflation index for the month of May, which will be published on Friday, shows that prices increased by 2.3% over a year. This would represent an acceleration compared to April (+2.1%).
The last Fed meeting last week was unanimously concluded with a status quo concerning guiding rates.
Several officials, who vote on monetary policy, have since shown that they were leaning in favor of a drop at the next meeting in late July.
“I don’t think we should wait much more,” said Governor Christopher Waller on Friday.
“If the inflation pressures remain contained” by the next meeting of the federal reserve, on July 29 and 30, “I will support a decrease in guiding rates” at that time, said Michelle Bowman.
Mr. Waller is considered a potential candidate for the succession of Jerome Powell. He had become governor of the Fed under the first term of Donald Trump, on the initiative of the latter.
The American president recently propelled Ms. Bowman to her post as vice-president of the Fed responsible for supervision, in order to let go of the bridle of financial actors.
