The Federal Reserve leaves the interest rate in the US unchanged. The American central bank is not giving in to pressure from President Donald Trump, who has repeatedly insulted Fed Chairman Jerome Powell for refusing to lower interest rates.
As a result, the US interest rate remains at 4.25 to 4.5 percent. “Unemployment is low and labor market conditions are good. Inflation is somewhat high,” the Fed explained. The interest rate set by the Fed applies to banks that lend money to each other. This indirectly affects savings rates, mortgages and loans for companies.
Trump has been urging an interest rate cut for some time. According to him, this would stimulate the economy because borrowing becomes cheaper. The Fed fears that inflation would rise as a result. The central bank must independently monitor the long-term consequences of monetary policy, regardless of the president.
Trump personally blames Chairman Powell for this and regularly insulted him in public. He called Powell, among other things, a “dummy” and a “stupid person”. Trump also threatened to fire Powell.
The US president cannot fire the Fed chairman because of disagreements over interest rate policy. According to experts, there are legal loopholes, such as dismissal for misconduct or dereliction of duty. Never before has a president fired a Fed chairman for such reasons. Powell’s term runs until May next year.