Key Facts
• Jerome Powell, Chair of the Federal Reserve (FRB), spoke at the ECB Forum in Portugal.
• Powell stated that without Trump administration tariffs, rate cuts would have already occurred.
• He confirmed, “We effectively held policy rates due to the scale of tariffs.”
• Former President Trump pressured the FRB for rate cuts, sending Powell a handwritten note saying “too slow.”
• U.S. media predicts Powell’s comments may provoke further backlash from Trump.
• The statement highlights the impact of trade policies on monetary decisions.
Summary
Jerome Powell, Chair of the Federal Reserve, revealed during the European Central Bank Forum in Portugal that the Trump administration’s tariff policies prevented earlier interest rate cuts. Powell emphasized that the scale of tariffs led the FRB to maintain policy rates. Former President Trump had previously increased pressure on the FRB for rate reductions, even sending Powell a handwritten note criticizing the pace of action. U.S. media speculates that Powell’s remarks could trigger further criticism from Trump. This development underscores the significant influence of trade policies on monetary decisions.
