Inflationary Report of the European Central Bank: Donald Trump’s Frustrated Outburst after the September 1st Reionization

The central bank has been criticized by Trump many times. The Fed is not designed to be subject to the kind of political pressure that can lead to unpopular decisions in fighting inflation.

The president was evidently frustrated that the European Central Bank was preparing to lower interest rates for the seventh time, while the Federal Reserve is in a holding pattern. European leaders did not impose triple-digit tariffs which would cause inflation.

“Tariffs are highly likely to generate at least a temporary rise in inflation,” Powell told the Economic Club of Chicago, noting that Trump’s import taxes were higher than most forecasters had expected. The inflationary effects could be more constant.

In his social media post, Trump called Powell’s report a “complete mess,” arguing “Oil prices are down, groceries (even eggs!) are down, and the USA is getting RICH ON TARIFFS.”

According to the latest inflation report from the Labor Department, grocery prices rose last month, despite the fall in oil prices. Egg prices rose between February and March due to bird flu.

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The back and forth is part of a long-running dispute between the president and the Fed chair, whom Trump nominated for that post during his first term in the White House.

Powell has tried to avoid antagonizing the president, often ducking questions about Trump’s commentary. He has been adamant that he will serve out the remainder of his term, which runs through May of next year.

Powell thinks the president does not have the power to fire him if he is guilty of bad behavior. The Supreme Court’s prior precedent supports that view. The White House may be willing to test that standard by firing board members of other independent agencies.

Powell said that lawmakers from both parties supported the ability of the Fed to set interest rate policy. But that doesn’t mean there isn’t grumbling.

At an event at the Economic Club of Chicago, Mr. Powell told the audience that it was the Fed’s obligation to make sure that a one-time increase in the price level does not become an ongoing inflation problem. He also stressed that the Fed could afford to be patient on taking further action on interest rates until it had more clarity about the outlook.

Mr. Trump soon reversed course and paused many of his tariffs for 90 days, citing a “queasy” bond market. A reprieve ended quickly as Mr. Trump increased tariffs on Chinese imports to at least 145 percent, even as he promised to sign trade deals with other countries. The whiplash has kept financial markets on edge and has done little to alleviate Mr. Powell’s concerns about the economic outlook.

For months, Mr. Trump has privately fretted about the prospect of a Great Depression-scale event happening on his watch — a scenario he shorthands in conversations as “1929.” The events of the past two weeks were so worrisome to Mr. Trump that he seems to have absorbed how close they came to a financial collapse.