US President Donald Trump in his entry on the Truth Social platform called on the president of the American Central Bank (equivalent to our NBP) to reduce interest rates. In his opinion, “it would be a great moment.”
“It would be a great time for the Fed President of Jerome Powell to lower interest rates. He is always 'late', but now he could change his image quickly” – wrote Donald Trump.
“Energy prices have dropped, interest rates have dropped, inflation has dropped, even eggs dropped by 69 percent, and the number of jobs increased, all in two months – a great win for America” - he wrote.
“Lower your interest rates, Jerome, and stop playing politics!” – he added.
See also: New data from the USA. Wages rush, inflation does not give up. Fed will wait
Donald Trump by introducing high duties on almost all countries in short -term countries can cause stagnation or even recession in his country. He was deaf to such warnings from economists. However, the appeal for reduction of interest rates partly admits that these fears are correct. As a rule, the interest rate cutting is the driving force of economic growth.
In a similar tone, members of the government in Poland towards the President of NBP Adam Glapiński have recently spoken. Their declared goal is to lower loan installments. Until now, the head of the bank was reluctant to reduce interest rates due to the still too high inflation in Poland.
Polish and American Central Bank are independent of the authorities in theory. In the case of the Fed, independence is that:
- He is not directly subject to the US President or Congress
- It independently determines the monetary policy, especially in the interest rates
- He makes decisions based on economic analyzes, not political pressure
See also: The head of the Fed responds to the criticism of Donald Trump. “I will not give up”
At the same time, the head of the Fed is appointed by the president and approved by the Senate. So politics, however, has something to say. Congress can change the law regarding the Fed. The bank also submits regular reports before Congress. In the moments of crisis (e.g. 2008, 2020), the Fed's policy and actions can be very closely related to the government's actions.
