Trump calls him a “very good guy” after a meeting on interest rates and shifts his tone to the Fed’s Powell chair.
US President Donald Trump has held a positive meeting with Federal Reserve Chairman Jerome Powell, and says he has got the impression that the central bank’s head may be ready to cut interest rates.
The two men met Thursday when Trump made a rare visit to the US Central Bank and toured the continuous renovation of the two buildings at its Washington headquarters.
Trump clashed with Powell during his visit, criticising the cost of renovating two historic buildings at its headquarters, and they refrained from the actual price tag for the project.
“We had a very good meeting…I think we had a very good meeting on interest rates,” Trump told reporters Friday.
The central bank said on Friday it was “thank you” Trump’s encouragement to complete the Washington building renovations, and it said it was “looking forward to” completing the project.
Trump, who called Powell “numbskull” earlier this week, said he had no intention of firing Powell as he frequently proposed, because he didn’t pay attention to the White House’s demands for a significant reduction in borrowing costs.
On Friday, Trump called Powell a “very good guy” when talking to reporters.
Rather than cutting interest rates, economists are widely hoping that central banks will leave benchmark rates in the range of 4.25% to 4.50% at the end of the two-day policy meeting next week.
Tariffs stall interest rate reduction
The central bank has been stable since December, and earlier this year, Powell said that the central bank could have been prepared to lower the fees by now, without the Trump tariffs imposed and the economic uncertainty it caused.
The visit could both sides approve the already announced trade contract as trade negotiations with Canadian food stalls as President Trump is expected to meet British Prime Minister Kiel Starmer. Trump said his administration could unilaterally set tariff rates in Canada.
“We actually didn’t have much luck in Canada. I think Canada could actually be something that’s not really negotiations, it’s just a tariff.”
Trump also said there is a 50% chance that Washington could enter into a contract with the European Union to reduce import duties.
“We have a 50/50 chance, and maybe less, but we have a 50/50 chance to trade with the EU,” Trump told White House reporters.
The president is pushing him to file a lawsuit over interest rate cuts, including falsely claiming that “we wiped out inflation.” Inflation actually rose to 2.7% last month.
Despite continuing pressure from the Trump administration, Powell has long argued that central banks must maintain independence from the White House.
In late May, the Fed reiterated this point, saying in a statement it would “requests based solely on prudent, objective and apolitical analysis.”
