Trump: My intuition is stronger than Powell's, the president should have some say in Fed policy

Although he repeatedly stated that he would not drive Federal Reserve Chairman Powell out of office, Trump, who is running for President of the United States, wants to have a greater influence on Federal Reserve decisions than Powell.

On Thursday, August 8th, Eastern Time, at a press conference held at the Bedminster estate, Trump stated that the President of the United States should have a certain degree of influence over interest rates and monetary policy. Trump, without naming Powell, claimed that his intuition is stronger than that of Powell and other Federal Reserve officials. Trump said:

"Personally, I have made a lot of money, I am very successful, and I believe that in many cases, my intuition is better than that of Federal Reserve officials or their chairman."

On Thursday, Trump also criticized Powell for adjusting interest rates "either a bit too early or a bit too late."

Trump believes that the President should have a say in Federal Reserve policy, a view that goes against the Federal Reserve's long-standing commitment to independence from any political influence.

Wall Street News noted that as the head of the Federal Reserve nominated by Trump during his presidency, Powell has repeatedly stated his commitment to defending the Fed's independence since taking office, promising not to let political pressure affect Fed decisions. Just at the most recent Federal Reserve monetary policy meeting press conference last month, Powell also stated that the Fed's independence is crucial, a view widely accepted in Congress, and that maintaining the Fed's independence is beneficial for promoting price stability.

During Trump's presidency, he has publicly criticized the Fed's decisions multiple times. Since becoming President in 2018, he has repeatedly criticized the Fed for raising interest rates, harming U.S. economic growth, maintaining excessively high policy rates compared to countries with lower rates, and even bluntly stating that Powell has "no feel" for the economy. However, until Trump left office, his remarks did not influence the Fed's interest rate decisions.

During this year's presidential campaign, Trump's attitude towards the Fed and Powell has once again become a major focus.

Last month, on the eve of the first presidential debate with Biden, Trump stated that if elected, he would allow Powell to complete his current term as Federal Reserve Chairman until January 2028, and would not seek to remove him from his position before the end of his term, "especially if I believe he is doing the right thing." Trump also stated that the Fed should avoid cutting interest rates before the November U.S. presidential election.

While attending the National Association of Black Journalists annual meeting last week, Trump stated that inflation and high interest rates are "destroying" America, and if elected, he will "substantially cut interest rates." Trump said that his government "will cut regulations, lower energy prices, lower interest rates, we will lower prices, and we will lower them very quickly."

As of the FOMC meeting last month, the Fed has kept its policy rate unchanged at a high level for more than twenty years in eight consecutive meetings. However, the decision statement released by the Fed after last month's meeting made a significant shift, stating that they are no longer saying they are "still highly concerned about inflation risks," but are now focusing on the risks faced by the dual mandate of employment and inflation, and stating that inflation is "somewhat" high, with "some" further progress in reducing inflation, employment growth "slowing down," and the unemployment rate remaining low but "rising somewhat." Subsequently, the market's expectations for the Fed's interest rate cuts this year have been rising repeatedly. After the announcement last Friday that the increase in non-farm payrolls in July was far below expectations, Wall Street's commentary on the non-farm employment report stated that the current issue is no longer whether to cut interest rates in September, but whether to cut by 50 basis points