The European Central Bank is expected to cut interest rates for the seventh time, while the Fed's 'Mr. Always Late' Powell messed everything up again. Yesterday
Below is the original translation of Trump's post on Truth Social:
"The European Central Bank is expected to cut interest rates for the seventh time, while the Fed's 'Mr. Always Late' Powell messed up everything again. Yesterday he released another typical chaotic report—oil prices are falling, food prices are dropping, even eggs are getting cheaper, and the U.S. is making a fortune through tariffs. This 'slowpoke' should have cut rates like the ECB long ago, and now it's more urgent than ever. The countdown to Powell's ousting needs to speed up!"
—Donald Trump, Truth Social, April 17, 2025, 06:12 AM
Background Analysis (based on references):
Reasons for ECB rate cuts
Addressing the impact of U.S. tariffs on the Eurozone economy (a full 25% U.S. tariff hike could reduce Eurozone growth by 0.5%) 3;
Escalating trade tensions, falling energy prices, and deflationary pressures from a stronger euro4;
Inflation persistently below the 2% target, requiring rate cuts to stimulate the economy and stabilize inflation expectations56.
Reasons for falling oil and food prices
Oil: Weak demand due to global trade war, OPEC+ production increase expectations, and rising U.S. crude inventories78;
Food: Improved supply chains, lower energy costs, and seasonal supply increases (e.g., warmer weather boosting fresh food supply) 910.
U.S. profit measures through tariffs
Imposing 10%-25% tariffs on imports, increasing fiscal revenue (2025 tariff income projected at $349.9-$503.5 billion) 1112;
Protecting domestic industries (e.g., steel, autos) and reshoring manufacturing13;
But at the cost of higher consumer expenses (household annual spending may rise by $3,800) 1415.
Powell's dilemma and firing risk
Report controversy: The Fed emphasizes waiting for clearer economic signals before cutting rates1617;
Firing pressure: Trump has repeatedly publicly criticized Powell for "moving too slowly," but the Fed's independence is legally protected, making firing possible but difficult1819.
Key Data Snapshot:
Indicator Trend Reasons & Impact
Eurozone interest rates ↓ Seventh cut Addressing trade war and deflation, deposit rate down to 2.25%
U.S. tariff income (2025) ↑ Record high Tariff policy covers most imports, annual income up $300B+
U.S. core inflation ↓ 2.8% (March) Falling energy/food prices offset tariffs, but long-term rebound possible2021
Powell's approval ↓ Continued decline Trump's pressure and market frustration over delayed cuts
Conflicting Views:
Trump's stance: Advocates immediate rate cuts to counter tariff impacts and accuses Powell of "missing the timing"2223;
Powell's response: Stresses balancing inflation and growth risks, as cuts may worsen long-term inflation pressure24
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