Powell, perhaps

History suggests that the new “too late” President Donald Trump “too late” for the chairman of the federal reserve system Jerome Powell has a great chance, although he was unlikely one if he does.

After all, the heads of the Central Bank have a long history to be too reluctant to raise or reduce interest rates.

Was it to Arthur Burns, supporting the level of too low due to the threat of Stagflation in the 1970s, Alan Greenspan did not respond quickly enough on the Dotcom bubble in the 90s, or the dismissal of Benna Bernanke from dismissal against housing prices as “holding” and reducing the 2008 crisis. done.

Thus, some economists believe that Powell, who has encountered a unique set of problems for the goals of the Fed and low inflation, has a great chance of wearing a “too late” label.

In fact, many of them believe nothing is that powl worth do now.

“Historically, go back and look at any federal reserve system, and I go back to 70, the Fed is always late in both ways,” said Dan North, Senior Economist Allianz Trade North America. “They tend to wait. They want to wait to make sure they are not mistaken and as long as they do it is usually late. The economy is almost always in recession.”

However, he said that given the flying policy when Trump’s tariffs threaten growth and inflation, Powell has little choice, in addition to sitting, there is no more clarity.

Powell is in a non-playing situation, with the threats of both sides of the Fed mandate, so at this point it does exactly that nothing, because it will be a mistake, “North said.

Trump wants to cut

Although Trump said the economy Probably going well No matter what the Fed does, he recently appealed to the Central Bank to reduce the rates, insisting that inflation was killed.

In A Truth social post Following the decision on the Fed this week, Trump said Trump said “too late” Jerome Powell, a fool who has no concept. “The president stated that” practically no inflation “, which was true for March, at least when the preferred Fed Inflation entered a month.

However, the president’s tariffs are not yet felt in the real economy, because they are almost a month old.

Recent economic data does not indicate prices or a tangible slowdown in economic activity. However surveys show Strengthened worries As in the production and in the service area, While consumer moods are sourAnd nearly 90% of the S&P 500 companies mentioned the tariff problems on the revenue.

At This week’s press conference after the meetingHowever, Powell repeatedly expressed confidence that he called the “solid” economy and the labor market, which corresponds to the maximum employment. “

No “preventive” cuts

The 72-year-old Fed chairman also rejected any idea of ​​reducing the preventive rate, despite the data polls indicate the current conditions.

“Powell suggested two reasons for not hurrying. The first is” not a real expectation price “is one he can regret,” the Krishna Huh, the head of the global policy and the Evercore ISI Central Bank strategies said. “The second is” we’re not sure it will be right ” – it makes more sense.”

Powell has its own specific story when the Fed was reluctant when inflation began to spike in 2021. He and his colleagues indicated this episode “transitional”, the call that returned to pursue them when they had to establish a number of historically aggressive hikes that still did not return the inflation to the target of 2% of the Central Bank.

“When they expect the labor market to confirm whether they should reduce their rates, they are too late,” said Joseph Lavorno, Chief Economist SMBC Nikko Securities and Senior Economic Advisor Trump in their first term. “I don’t think the Fed is quite promising.”

Indeed, if the Fed uses the job market as a guide, it will almost certainly be behind the curve. The old proverb on Wall -Story says, “The job market is the last one that knows” when the recession goes, and the story was quite consistent, that the loss of work usually did not start until the decline has begun.

Lavorgna believes that the Fed is experiencing its own story and will miss this call because politicians will unsuccessfully try to play on tariffs.

“We’re not going to know whether it is not too late,” he said. “Economic history combined with a modern market pricing suggests that there is a real risk that the Fed will be too late.”