Trump's old feud with Fed chair might return as interest rates stay high
Former presidentʼs promise to lower borrowing costs faces reality of stubborn interest rates. His past conflicts with Federal Reserve and its chair could resurface in potential second term
In his new campaign Donald Trump makes bold promises about cutting Americansʼ borrowing costs but economic experts dont see interest rates dropping anytime soon. The rates — which stayed super-low before covid-19 — might stay up for quite a while
The situation could lead to a re-match between Trump and Jerome Powell (the Fed chair Trump picked back in his first term): while Trump wants lower rates Powell and the Fed focus on their own policy goals. During his time in office Trump often attacked the Fedʼs decisions; he thought rates were too high even then
The history between them is quite complex — Trump picked Powell to lead the Fed around 6 years ago but their relationship went south pretty fast. Trump made lots of public statements against Powellʼs decisions which made many people worried about Fedʼs freedom to make its own choices
The whole thing brings up some big questions: how will Trump deal with the Fed if rates stay high; what happens to the Fedʼs independence in decision-making and how might this affect regular peoples mortgage rates and credit card bills (which are already pretty high right now)
