US President Donald Trump has posted a cartoon on social media, with his plan to sack Federal Reserve Chairman Jerom Powell. In the photo, Trump is seen saying- You are fired! This case has come to light after Powell’s decision to reduce interest rates. There has been a long conflict between Trump and Powell on this issue. Trump had appointed Powell to this post, but has threatened to remove him several times.
What will happen to America’s economy?
The President has also criticized Lisa Cook, Governor of Federal Reserve. Due to this, concern has increased in the American public about the direction of the country’s economy. In Trump’s previous two posts, which he shared by a margin of a few minutes, he claimed that he had reduced the rates of home loan.
In fact, earlier this month, the Federal Reserve had cut its major interest rate by a quarter points and this year two more cuts were estimated. The reason for this was said to be increasing concerns about the health of the labor market of the country. This was the first cut after December, decreasing the short -term rate from about 4.3% to 4.1%.
Inflation above the target of 2%
Fed officials led by Chairman Powell were till now keeping the rates stable, so that tariffs, strict immigration policies and other decisions of the trump administration could be seen on inflation and economy. However, now Fed’s focus has become more focused on employment.
Inflation still remains slightly above the target of 2%, but in the last few months the new jobs have almost stopped and the unemployment rate is increasing. Decreasing rates can make loans cheaper for homes, vehicles and companies, which is expected to promote economic activities and employment.
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