How Trump Could Gain Control of the Fed
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- in Economy
How Trump’s Attacks on the Fed’s Powell Have Intensified
<!–> [!–> <!–>Powell’s termination cannot come fast enough!–> April 17 <!–>I don’t know why it would be so bad, but I’m not going to fire him.–> June 12 <!–>I talked about the concept of firing him.–> July 16 <!–> –> <!–> –><!–> [–><!–> –><!–> [–><!–>Mr. Trump nominated Mr. Powell to his post in 2017. But […] More
- in Economy
White House Faces Risk of Economic Fallout From Iran Strike
President Trump, aware of how high gas prices could affect his popularity, demanded on social media that the U.S. “KEEP OIL PRICES DOWN.”President Trump on Monday began to confront the potential economic blowback from his military strikes on Iran, which threatened to send oil and gas prices soaring at a moment when U.S. consumers are already facing significant financial strains.The mere prospect of rising energy costs appeared to spook even Mr. Trump, who took to social media to push for more domestic drilling while demanding that companies “KEEP OIL PRICES DOWN”; otherwise, they would be “PLAYING RIGHT INTO THE HANDS OF THE ENEMY.”“I’M WATCHING!” the president added.By midday Monday, global oil markets appeared relatively muted, two days after Mr. Trump dispatched U.S. bombers on a mission to disable three Iranian nuclear sites. Prices rose over the weekend before ultimately settling, as Washington — and the rest of the world — braced for the possibility that Tehran may still retaliate.In one worst-case scenario, Iranian leaders could look to shutter or otherwise impede access to the Strait of Hormuz, the narrow waterway that serves as the critical entrance point to the Persian Gulf. The world ships substantial amounts of oil and liquefied natural gas through the passage, so any interruption to commerce could cause energy prices to surge globally.A spike in energy costs could prove especially difficult for American consumers and businesses this summer, given that it could arrive at about the same time that Mr. Trump plans to revive his expansive, steep tariffs on nearly every U.S. trading partner. Many economists expect those levies to push up prices after years of high inflation.In April, the president announced, then suspended, those sky-high duties, seeking to quell a global market meltdown over his disruptive and legally contested campaign to remake global trade. But Mr. Trump has not wavered in his plan to implement the tariffs on July 9, and many economists expect companies — which pay the duties when they source foreign products — to pass the added costs down to their customers.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More
- in Economy
Fed’s ‘Wait and See’ Approach Is Intact as New Risks Cloud Economic Outlook
The central bank is set to hold interest rates steady for its fourth straight meeting, a pause that could be extended through the summer.Through all the twists and turns of President Trump’s tariffs, a widespread immigration crackdown and the scuffles surrounding the Republican tax and spending bill, the Federal Reserve has stayed steady in its stance that it can go slow in taking action on interest rates.That message holds as officials gather on Tuesday for a two-day meeting, at which they are set to extend a pause in rate cuts that has been in place since January. It is also likely to endure throughout the summer, giving the Fed at least a couple more months before it must make a difficult decision about when and by how much to lower borrowing costs.“As long as the labor market continues to look solid but inflation continues to mainly move sideways, it’s going to be a ‘wait-and-see’ situation,” said Jon Faust, a fellow at the Center for Financial Economics at Johns Hopkins University and a former senior adviser to Jerome H. Powell, the Fed chair.When the central bank sets monetary policy, it has two goals in mind: keep inflation at 2 percent and ensure that the labor market is healthy. Currently, both aims are in sync.Inflation has stayed remarkably stable in recent months. The latest Consumer Price Index report, released last week, showed price pressures remain well contained. Employers are hiring less than they once did and fewer workers are entering the labor force, but layoffs have yet to rise in a meaningful enough way to lift the unemployment rate.The economy has all the makings of a soft landing, a rare feat in which the central bank tames inflation without pushing the economy into a recession. But such an outcome is not guaranteed. Mr. Trump’s policies have stoked fears that inflation will eventually re-accelerate, growth will slow and the labor market will weaken, forcing officials to make a tough decision about which of their goals to prioritize.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More
- in Economy
As Trump’s Tariffs Reshape Trade, Businesses Struggle With Economic Uncertainty
At the worst point of the labor shortage that emerged in the wake of the Covid-19 lockdowns, Thunderdome Restaurant Group had 100 people sign up for a job interview and only 15 show up. Of the two workers it hired, one never came in.The job market has cooled significantly since then, and Joe Lanni, who runs the Cincinnati-based company with his brother, now faces a different dilemma: how to grow the business, which has over 50 locations, while controlling costs as concerns about the economy spread.So they’re rethinking menu items like freshly made tortillas that require a dedicated full-time worker. They are also planning to shutter a handful of locations where sales have been softest, while adding more outposts of their fast casual restaurants that are doing well.Uncertainty about the economy has skyrocketed as President Trump has begun to radically reshape the global trading system with tariffs, cut off a crucial supply of workers with an immigration crackdown and floated big changes to the rules and regulations that govern how businesses operate. Consumers, who fuel the American economy, have become more hesitant to spend, and according to recent surveys, both the services and manufacturing sectors are slowing.But the economy does not appear to be at the cliff’s edge just yet, and employers like Mr. Lanni don’t want to be too cautious and miss out on opportunities.As his restaurants gear up for outdoor service this summer, Mr. Lanni said, he still expects head count across the company to swell by about 200 people, to around 1,500 employees, before receding in the fall. The stakes are high, however.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More
- in Economy
Trump Criticizes the Fed in a Private Meeting With Powell
Jerome H. Powell stressed in his first meeting since the president returned to the White House that policy decisions would be “based solely on careful, objective and nonpolitical analysis.”President Trump revived his criticism of the Federal Reserve in a private meeting with its chair, Jerome H. Powell, on Thursday, saying it was a mistake not to lower interest rates.The meeting, which was organized at Mr. Trump’s request, is the first since the president returned to the White House.Mr. Powell and Mr. Trump discussed how the economy was evolving with regards to inflation, the labor market and growth. The chair did not share his expectations for monetary policy, the Fed said in a statement.He told the president that such decisions would “depend entirely on incoming economic information and what that means for the outlook,” according to the statement, and would be “based solely on careful, objective and nonpolitical analysis.”Karoline Leavitt, the White House press secretary, told reporters on Thursday that Mr. Trump expressed his belief to Mr. Powell that the Fed was making a mistake by not lowering interest rates.The meeting comes at a fraught moment for the economy, which now faces a variety of risks stemming from Mr. Trump’s policies. That has complicated the Fed’s job as it seeks to stamp out the remaining pressures on prices stemming from the pandemic and contain new ones that surface as a result of the tariffs, while also supporting a labor market that has begun to slow.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More
- in Economy
Trump’s Tariffs Bump Into Reality as Economic Strategy Wavers
After weeks of bluster and escalation, President Trump blinked. Then he blinked again. And again.He backed off his threat to fire the Federal Reserve chairman. His Treasury secretary, acutely aware that the S&P 500 was down 10 percent since Mr. Trump was inaugurated, signaled he was looking for an offramp to avoid an intensifying trade war with China.And now Mr. Trump has acknowledged that the 145 percent tariffs on Chinese goods that he announced just two weeks ago are not sustainable. He was prompted in part by the warnings of senior executives from Target and Walmart and other large American retailers that consumers would see price surges and empty shelves for some imported goods within a few weeks.Mr. Trump’s encounter with reality amounted to a vivid case study in the political and economic costs of striking the hardest of hard lines. He entered this trade war imagining a simpler era in which imposing punishing tariffs would force companies around the world to build factories in the United States.He ends the month discovering that the world of modern supply chains is far more complex than he bargained for, and that it is far from clear his “beautiful” tariffs will have the effects he predicted.This is not, of course, the explanation of the events of the past few days that the White House is putting out. Mr. Trump’s aides insist that his maximalist demands have been an act of strategic brilliance, forcing 90 countries to line up to deal with the president. It may take months, they acknowledge, to see the concessions that will result. But bending the global trade system to American will, they say, takes time.“Have some patience and you will see,” the president’s press secretary, Karoline Leavitt, told reporters on Wednesday.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More
- in Economy
Trump Says Fed Chair Jerome Powell’s ‘Termination Cannot Come Fast Enough’
President Trump lashed out on Thursday at Jerome H. Powell, the chair of the Federal Reserve, saying, “Powell’s termination cannot come fast enough!”Mr. Trump’s ire followed remarks by Mr. Powell on Wednesday, when he warned in a speech that the president’s tariffs could create a “challenging scenario” for the central bank by putting its two main goals — stable inflation and a healthy labor market — in tension.Mr. Powell reiterated that the Fed could afford to be patient with its interest rate decisions until it had more clarity about Mr. Trump’s policies. The Fed chair’s emphasis on the need to ensure that a temporary rise in inflation from tariffs did not become a more persistent problem suggested that the bar for further rate cuts was high.The president has been pushing for Mr. Powell to cut rate since returning to the White House. On Thursday, he referred to expectations that the European Central Bank would lower borrowing costs, saying the Fed should do the same.“The ECB is expected to cut interest rates for the 7th time, and yet, ‘Too Late’ Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete ‘mess!’,” Mr. Trump wrote on his Truth Social platform. “Oil prices are down, groceries (even eggs!) are down, and the USA is getting RICH ON TARIFFS. Too Late should have lowered Interest Rates, like the ECB, long ago, but he should certainly lower them now. Powell’s termination cannot come fast enough!”The Fed seeks to operate independent of political influence, something that Mr. Powell on Wednesday said was a “matter of law.” He also said the Fed’s independence was “very widely understood and supported in Washington and in Congress where it really matters.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More
