The Globe and Mail reports in its Friday, Jan. 3, edition that U.S. president-elect Donald Trump has no plans to fire Federal Reserve chairman Jerome Powell, but tensions are brewing over economic policy. The Globe's Rita Trichur writes that with strong growth and persistent inflation, the Fed is in no rush to cut interest rates further in 2025, potentially leading to conflict with Mr. Trump.
Although he appointed Mr. Powell, Mr. Trump's early support faded as he labelled him an "enemy" of the American people and criticized the Fed as "weak." He has suggested that the president should influence interest rates and accused Mr. Powell of "playing politics" by cutting rates before the election to benefit Democrats. Mr. Trump's supporters have intensified their attacks on the Fed since his election.
Mr. Trump is likely to launch more attacks after taking office on Jan. 20, despite Mr. Powell's intention to stay and Mr. Trump's lack of legal authority to fire him. Mr. Powell and the Fed serve as convenient scapegoats. Mr. Powell's commitment to stay above politics will soon be tested after inauguration day. The Fed is expected to maintain rates at its Jan. 29 meeting. More conflicts are anticipated.
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