Trump still attacks Powell (and calls him « Too Late »): « Cut the rates ». Today the decision of the ECB

President Donald Trump has launched a new and hard attack against the number one of the Federal Reserve, Jerome Powell, urging him to cut interest rates after the publication of disappointing data on employment. According to the ADP report, in May the American private sector has created only 37 thousand jobsthe weakest monthly figure from March 2023 and much below the expectations of economists, which focused on 110 thousand new jobs.

«The data ADP has come out !!! Powell « too late » now has to lower the rates « Trump wrote on Truth Social. « It’s incredible !!! » he added underlining how Europe has already reduced rates « nine times! ». In reality, the ECB has cut the rates seven times from June 2024, they will go up to eight with today’s probable intervention. But writing that « Europe has lowered rates nine times! », Trump puts pressure on Powell, suggesting that the Fed is late compared to other central banks. It is a recurring communication strategy in its style: to exaggerate numbers or events to increase the emotional and political impact of the message, even at the cost of deviating from the precision of the data.

The braking of employment

The attack comes a few days after New official report of the Bureau of Labor Statistics, scheduled for Fridayand after Trump himself had met Powell at the White House a week ago. According to the Karoline Leavitt spokesman, the president would have said to the number one of the Fed that « he is making an error not to cut the rates », putting the United States « at disadvantage compared to China and other countries ». For its part, the Fed reiterated that monetary policy « must be guided by economic data, not by politics ».

Trump, who for months has called Powell with the « too late » derisory epithet, that is « too late »he has repeatedly hinted that he wants to remove him before the expiry of the mandate (May 2026), only to go back to April. But the criticisms have continued and now they return strongly after the signs of slowing the economy.

Slows down the activity and increases uncertainty

To worsen the picture, the iThe Beige Book of the Fed: six of the twelve districts signal a slight or moderate drop -off economic activity, while the demand for consumers appears weaker. Companies remain cautious in investmentsalso due to the high political and economic uncertainty. Price pressures are moderatebut fears related to international duties and tensions persist. Some companies have indicated that they have introduced new contractual clauses to protect themselves against the increase in costs.

Eyes on the ECB: probable new rates cut

While the Fed takes time, the attention shifts to Europe: Today the European Central Bank meets in Frankfurt and the market expects a new cut of interest rates of 25 basis pointsthe ninth from June 2024. But more than the cut itself, there is expected for the words of President Christine Lagarde on monetary policy in the coming months to respond to the slowing of the economy caused by Trumpian duties.

In May, inflation fell by surprise to 1.9% on average in the euro area, from 2.2% in April, according to the preliminary estimate of Eurostat, returning under the 2% target set by the ECB on the medium term. The drop in inflation, combined with still weak growth, strengthens the expectations of a more accommodating ECB in the coming months.

The Fed remains cautious

Despite the growing political pressure, the Federal Reserve continues to maintain the rates still and refers every decision to the next FOMC meetingthe operating arm of the American Central Bank on the calendar on 17-18 June. Powell reiterated that every choice will be guided by data and prudencein a context of great uncertainty. But with the economy that slows down and the estimated inflation raised in the United States precisely because of the repercussions of Trump’s duties, the position of the Fed becomes increasingly difficult. On the one hand, a cut of the rates could give a push to the economy, promoting to the creation of new jobs (one of the two Fed mandates) on the other, however, the central bank has the task of maintaining price stability (its second term).