Last Sunday, the chairman of the Federal Reserve - Jerome Powell slashed its interest rate to near zero percent. This development is coming after Coronavirus pandemic has forced several businesses in the U.S. to temporarily suspend operation. The pandemic came at a time when the U.S and global economy is facing challenges. In a moment like this, cut in interest rate can help banks, businesses, and households in the US to withstand the current economic downturn.
What is not clear yet is the stance of President Donald Trump regarding the interest rate cut. President Donald Trump fury at the Federal Reserve chair - Jerome Powell - on Saturday makes one wonder the quality of relationship existing between the Whitehouse and Fed. While responding to pressmen interviews at Whitehouse, President Trump asserted that he had the power to either demote or dismiss the central bank’s chairman.
During the Saturday press conference, Trump lamented the Fed was not being proactive and was “following.”
“Our Fed is not doing what they should be doing. We shouldn’t have a Fed [interest] rate that his higher than our competitor nations. If you look at Germany, they are essentially under zero. Japan is negative. Others are negative,” Trump noted.
That slash in the interest rate on Sunday is a clear indication that Trump fury at Powell was a disagreement over policy. Shortly after the Fed chair announced the slash in interest rate, President Trump expressed his excitement regarding the development.
"That’s really good news. That’s really great for our country. It’s something that — we’re very happy," Trump told reporters at the White House on Sunday.
"They did it in one step. And I think that people and the markets should be very thrilled. And that brings us ... in line with what other countries are. They actually have negative rates, but we got it down to potentially zero. So that’s a big step, and I’m very happy I did it."
"You will not hear anything bad [from] me unless it’s a month or two from now," he said with a smile.
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