Navarro: Powell beginning to ‘come over to the idea’ that he shouldn’t keep rates up due to tariffs
White House trade adviser Peter Navarro late Tuesday said Federal Reserve Chair Jerome Powell is gravitating “to the idea” he shouldn’t keep interest rates at current levels due to President Trump’s tariffs.
“Powell should see the tea leaves here,” Navarro said during an appearance on NewsNation’s “The Hill.”
“I mean, interestingly enough, he’s beginning, grudgingly, to come over to the idea that he shouldn’t be holding rates up because of tariffs,” he added.
Navarro also said the board of governors shakeup and shift in members’ opinions on rates has upped the pressure on Powell.
“He’s a lame duck right now,” Navarro said of the chair.
“We’re putting Stephen Miran on the board. He’ll join two others there, who, for the first time since 1990 dissented against Powell’s opinion with respect to whether or not the lower rates,” he added.
Fed board member Adriana Kugler, an appointee of former President Biden, resigned earlier this month and is set to be temporarily replaced by Trump’s nominee, Miran, who is chair of the White House’s Council of Economic Advisers.
Powell, during his annual Jackson Hole, Wyo., speech last week, signaled that the Federal Reserve could soon lower interest rates as “policy in restrictive territory” may “warrant adjusting.”
In recent months, the Trump administration has collectively urged Powell to lower rates or resign while Trump has threatened to fire the Federal Reserve chair, whom he appointed.
The president also said he’s considering a lawsuit against Powell for his decisions.
“Jerome ‘Too Late’ Powell must NOW lower the rate. Steve ‘Manouychin’ really gave me a ‘beauty’ when he pushed this loser. The damage he has done by always being Too Late is incalculable,” Trump wrote in a Truth Social post earlier this month.
“Fortunately, the economy is sooo good that we’ve blown through Powell and the complacent Board,” he added. “I am, though, considering allowing a major lawsuit against Powell to proceed because of the horrible, and grossly incompetent, job he has done in managing the construction of the Fed Buildings.”
Democrats have condemned the comments as an attempt to illegally influence the Federal Reserve. Party members have slammed the president for his actions, including announcing his decision this week to fire board member Lisa Cook.
“Donald Trump is playing a dangerous game of Jenga with a key pillar of our economy,” Sen. Minority Leader Chuck Schumer (D) said in a Tuesday statement. “This brazen power grab must be stopped by the courts before Trump does permanent damage to national, state, and local economies.”