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

U.S. Federal Reserve Chair Jerome Powell has been dubbed “Too Late” by President Donald Trump, a nickname that may prove to be accurate given the historical tendency of central bank leaders to act too slowly in response to economic challenges. Throughout history, Fed chairs like Arthur Burns, Alan Greenspan, and Ben Bernanke have been criticized for being slow to adjust interest rates, leading to negative consequences for the economy.

Economists believe that Powell, facing unique challenges such as Trump’s tariffs impacting both growth and inflation, is in a difficult position where any action he takes could be deemed a mistake. Some argue that Powell’s decision to maintain the status quo and not make any changes to interest rates is the right move given the uncertain economic landscape.

President Trump has been vocal about his desire for the Fed to cut rates, citing low inflation as a reason to do so. However, recent economic data does not show significant inflation or a slowdown in economic activity. Despite concerns in the manufacturing and service sectors, Powell remains optimistic about the strength of the economy and the labor market.

Powell has dismissed the idea of making preemptive rate cuts, citing uncertainty about the best course of action. However, critics argue that the Fed’s reluctance to act proactively could result in them being too late to address potential economic downturns. The Fed’s reliance on labor market data as a guide may also lead to delays in responding to changing economic conditions.

In conclusion, the debate over whether Powell is acting too late or making the right decisions in the face of economic challenges continues. Only time will tell if the Fed’s cautious approach will prove to be effective or if they will once again be criticized for being too slow to act.