Their dispute is a reminder that monetary policy can’t make up for economic policy errors like tariffs.
President Trump’s tariff war isn’t going well, with market ructions and evidence of a slowing economy. So it was probably inevitable that Mr. Trump would demand that the Federal Reserve ride to his rescue by cutting interest rates. The President took to social media Thursday morning to blast Fed Chairman Jerome Powell with his familiar nuance.
Mr. Trump was reacting to Mr. Powell’s remarks Wednesday that the President’s tariffs complicate the Fed’s job of maintaining stable prices with low unemployment. “The level of the tariff increases announced so far is significantly larger than anticipated. The same is likely to be true of the economic effects, which will include higher inflation and slower growth,” Mr. Powell told the Economic Club of Chicago.
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