President Trump showed concern about the growth of the economy. He called the Fed Chairman Jerome Powell “Mr. Too Late” because he hasn’t been quick enough to cut interest rates. On the other hand, he is sure that there isn’t and won’t be any inflation; therefore, he wants the interest rates to be lowered now. Referring to the energy costs and food prices, Trump wrote on his Truth Social, “ With these costs trending so nicely downward, just what I predicted they would do, there can almost be no inflation, but there can be a slowing of the economy unless Mr. Too Late, a major loser, lowers interest rates, now. BREALING: President Trump calls for "preemptive [rate] cuts" and claims "there is virtually no inflation." Trump is now calling Fed Chair Powell "Mr. Too Late." pic.twitter.com/I3sBD0b6RI — The Kobeissi Letter (@KobeissiLetter) April 21, 2025 Supported by the Bureau of Labor Statistics (BLS) monthly consumer price index (CPI) report for March, prices fell 0.1%. This is the first time that inflation has gone down in almost five years. If you take out food and energy, “core” or “underlying” inflation rose by only 0.1%, which is the slowest rate since June. Although the US has not faced major inflation concerns, economic growth has been severely affected. However, this is something that market watchdogs have predicted since the tariff war began. Now, the tariff war is at its peak, with China and the US being the main players. The US could face a recession, and Trump , who seemed unbothered, now cannot sit still. Polymarket users predict that the Fed will keep rates unchanged Polymarket users now think there is a 90% chance that the Fed will keep rates at 4.5% at its meeting in May. This is up from 62% a week ago. Whether or not the Fed will change the rates Source: Polymarket Also, CME Group says buyers have an 85% chance that rates will stay the same in May. Since Powell’s comments, the chances of a May rate cut have gone down. That’s why the Fed will keep rates high until there are signs that inflation is going down. On the other hand, Powell doesn’t care much about economic growth. Instead, his concern is inflation. He made it clear that the US central bank will not be in a hurry to respond to the large-scale tariffs put in place by the Trump administration or to the chaos in the financial markets that have followed due to fears of a global economic slowdown. The markets crash as Trump shows panic Trump’s comments affected the stock markets, which were already going down sharply on Monday, but Trump’s post sent them even further, with the broad S&P 500 stock index down 2% in early trading. Now, the S&P has lost $750 billion in market cap. In addition, Trump’s threats against Powell and his plans to raise tariffs have weakened the dollar, and the interest rate on 10-year Treasuries has gone up. On Monday, it went up by a small amount to 4.35%. Those rates set the standard for mortgage rates, meaning that the cost of getting money to buy a house will likely stay high. “Europe has already “lowered” seven times.”- Trump points Powell to EU As Trump told Powell to lower the rates, he pointed to Europe, which has already cut its interest rates seven times. However, the ECB raised its rates sharply to fight inflation from 2022 to 2023, so it has been lowering them slowly. In fact, in the last three months of 2024, the economies of the 20 countries that use the euro grew by a small 0.2%. In March, inflation was 2.2%, close to the bank’s goal of 2%. Therefore, economic growth is now more important At a meeting in Frankfurt, the bank’s rate-setting council agreed to pull the benchmark rate down by 0.25% to 2.25% to counter economic growth worries caused by Trump. Cryptopolitan Academy: Coming Soon - A New Way to Earn Passive Income with DeFi in 2025. Learn More
