President Donald Trump lashed out at Federal Reserve Chair Jerome Powell on Thursday, calling him a “fool” after the central bank left interest rates unchanged amid signs of persistent inflation and a cooling labor market.
“‘Too Late’ Jerome Powell is a FOOL, who doesn’t have a clue,” Trump wrote on Truth Social. “Oil and Energy way down, almost all costs (groceries and ‘eggs’) down, virtually NO INFLATION, Tariff Money Pouring Into the U.S. — THE EXACT OPPOSITE OF ‘TOO LATE!’ ENJOY!”
Trump, who has long criticized Powell’s handling of monetary policy, added: “Other than that, I like him very much!”
The Fed on Wednesday kept its benchmark interest rate steady, signaling it will remain cautious as it weighs conflicting risks: inflation that remains above its 2% target and signs of softening growth.
In its post-meeting statement, the Federal Open Market Committee (FOMC) said, “Uncertainty about the economic outlook has increased further,” noting that “the risks of higher unemployment and higher inflation have risen.”
UBS analysts said the meeting underscored the growing tension between inflation and growth, with the Fed choosing a reactive rather than preemptive approach to monetary policy.
“Policy is well-positioned to respond to the risks to either leg of the dual mandate,” UBS wrote in a note.
“We don't think we need to be in a hurry. We think we can be patient,” Powell said during his press conference.
The Fed’s preferred inflation gauge, the core Personal Consumption Expenditures (PCE) index, was at 2.6% in the latest reading, still above the central bank’s target. Powell described that level as “somewhat above target,” but said it limits the Fed’s ability to act aggressively in response to weakening growth.
UBS noted that while Powell avoided committing to a specific policy path, he left the door open for rate cuts if job losses become pronounced — even if inflation remains elevated.
The FOMC unanimously voted to hold rates steady, citing solid economic activity and stable labor markets. Still, the committee warned that recently announced tariffs could further complicate the inflation outlook.
“If the large increases in tariffs that have been announced are sustained, they are likely to generate a rise in inflation, a slowdown in economic growth, and an increase in unemployment,” Powell said in his prepared remarks.
Trump, who imposed tariffs during his presidency and has proposed expanding them if re-elected, dismissed concerns over their inflationary impact. “Virtually no inflation,” he insisted in his post, countering Powell’s more cautious tone.
While economic data through the first quarter showed continued growth, Powell said the Fed would wait for “greater clarity” before making any changes to its policy stance.
The central bank’s challenge, UBS said, is to navigate “the worsening growth and inflation trade-off” without triggering unnecessary economic harm — a tension that is becoming more politically charged ahead of the 2024 election season.