In a highly anticipated speech on Friday, Federal Reserve Chairman Jerome Powell said the Fed isn’t equipped to deal with the economic impact of President Trump’s trade war.
“While monetary policy is a powerful tool that works to support consumer spending, business investment, and public confidence, it cannot provide a settled rulebook for international trade,” he said in prepared remarks at a closely watched conference in Jackson Hole, Wyoming. “We can, however, try to look through what may be passing events, focus on how trade developments are affecting the outlook, and adjust policy to promote our objectives.”
Powell, who has been under pressure from Trump to aggressively cut rates, also said the US economy is in a “favorable place” and that the central bank will “act as appropriate” to keep the current economic expansion on track.
But he stopped short of signaling whether the Fed will cut interest rates again anytime soon.
The overall tone of his statements quickly prompted disapproval from Trump, who tweeted that Powell is a “bigger enemy” than China’s leader Xi Jinping.
“….My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?” Trump wrote after the speech ended.
Trump has been blaming Powell and his failure to lower rates for recent signals that the economy could be nearing a recession.
“He’s a golfer who can’t putt, has no touch,” Trump tweeted of Powell earlier this week. “Big US growth if he does the right thing, BIG CUT.”