Powell may have a hard time avoiding Trump’s ‘Too Late’ label even as Fed chief does the right thing

History suggests that the new “late” nickname of President Donald Trump has a strong chance of coming out for the chairman of the Federal Reserve Jerome Powell, although he would hardly be alone if so.

After all, leaders of the central bank have a long history of too reluctant to increase or lower the speed of speed.

Whether it was Arthur Burns that the rates kept too low in the face of the Stagflation threat in the 1970s, Alan Greenspan did not respond quickly enough to the Dotcom Bubbl rates prior to the financial crisis of 2008, nourished leaders have long been criticized as a slow complicated complicated complications that they should do that must be done to act absent for absent complications that they have to act.

So among economists, Powell, confronted with a unique series of challenges for the twin goals of the FED of full employment and low inflation, you think, you have a strong chance of wearing the “late” label.

Miss of them even thinks that nothing is exactly what Powell Should have to Do now.

“Historically, go back and look at every Federal Reserve, and I go back to the 70s, the Fed is always late in both ways,” said North, senior economist at Allianz Trade Noord -America. “They tend to wait. They want to wait to rise, they will not make a memake, and by the time they do that, it is usually too late.

However, he said that, in view of the volatile policy mix, with Trump’s through which growth and inflation, Powell has little choice, but to be tightly absent more clarity.

Powell is in a no-win situation, with threats for both sides of the FED mandate, “and that is why he is currently doing exactly the right right, which is nothing, it is somehow to be a memistake,” said North.

Trump wants a cut

Although Trump said that the economy Probablay will be fine, regardless of what the Fed is doing, he caught the central bank Latly to cut racks, insisting that the inflation you are defeated.

In a truth of social post after the FED decision this week to keep races unchanged, Trump stated that “too late” Jerome Powell is a fool who has no idea. ” The president stated that there was “virtually no inflation”, which was in the march where for March, at least when the preferred meter of the Fed for the month came unlimited inflation.

However, the rates of the president still have to be felt in the real economy, because they are barely a month old.

Recent economic data do not indicate price peaks or a noticeable delay in economic activity. However, surveys show high care in both production and service sectors, while consumer sentiment is soured, and almost 90% of the S&P 500 companies mentioned tariff concerts at their quarterly calls.

During this week’s post-meeting news conference, however, Powell repeatedly expressed Confides in what he “Solid” economy and a labor market “consistent with maximum employment.”

No ‘pre-perpress’ cuts

The 72-Yare-Old FED chairman has also rejected any idea of ​​a pre-perpress rate reduction, lift research data indicates that the current circumstances are indicated.

“Powell offered two reasons not to be in a hurry. The first -” not real costs to wait ” – is someone who may regret it,” said Krishna Guha, head of the global policy and the central bank strategy at Evercore Isi, in a customer nut. “The second -” we don’t know for sure what is the right one ” – is more logical.”

Powell has a historical history of being too late, with the Fed hiking when inflation started to nail in 2021. He and his colleagues labeled that episode “passing”, a call that returned to Hatm Ken, they do not have the inflation back to the 2% target of the central bank.

“If they are waiting for the work market to confirm whether they should cut, they are by definition too late,” says Joseph Lavorgna, chief economist at SMBC Nikko Securities and a senior economic adviser to Trump in his first term. “I don’t think the FED is there enough.”

Indeed, if the Fed uses the work market as a guide, it will almost certainly go behind the curve. An old saying on Wall Street says: “The labor market is the last one who knows” when a recession comes, and the history that you are reasonable that job losses have generally only started until a decline has started.

Lavorgna thinks that the Fed is impeded by its own history and this call will miss ACE well, because policy makers try to perform the impact of rates in vain.

“We’re not going to know if it’s too late until it’s too late,” he said. “Economic history in combination with current market prices suggests that there is a real risk that the Fed will be too late.”