Trump criticizes Federal Reserve Chair Powell in relation to the housing sector, accusing him of raising mortgage rates in another attack
In a series of recent developments, President Donald Trump has launched twin attacks against Federal Reserve Chair Jerome Powell and Federal Reserve Governor Lisa Cook, while inflation concerns and rate cut speculations have dominated the economic landscape.
The week began with Trump calling for the Federal Reserve to cut interest rates on Tuesday. This was followed by his threat to Cook, stating "Cook must resign, now!!!" on Wednesday. The President has continued his attacks on Powell and Cook, as the Federal Reserve Chair prepares to deliver a speech at the annual Jackson Hole central banking symposium on Friday.
Meanwhile, the Bureau of Labor Statistics reported that the consumer price index (CPI) rose 0.2% in July compared to last month and 2.7% from a year ago. The increase in inflation moved further away from the Federal Reserve's target rate. The Bureau of Labor Statistics also released the producer price index (PPI) for July, which showed an increase of 0.9% from the prior month and 3.3% from a year ago, raising concerns about a resurgence of inflationary pressures in the economy.
Wholesale inflation increased much more than expected in July, adding to these concerns. The average rate on a 30-year fixed mortgage fell to 6.58% last week, the lowest level since October, offering some relief to homebuyers amidst the inflationary pressures.
The Federal Reserve Governor maintains an outlook for three interest rate cuts in 2025, and the Fed's next policy meeting will have investors looking for hints about Powell's economic outlook and the likelihood of rate cuts. The next Federal Reserve policy meeting will be held on Sept. 16-17.
The Council of Economic Advisers Chair Stephen Miran is discussing the Federal Reserve's decisions on interest rates, as the economic landscape continues to evolve. The current chief of staff of the US Justice investigative agency investigating allegations of mortgage fraud made by Governor Cook is not publicly specified.
Fox Business, Eric Revell, Matthew Kazin, Daniella Genovese, and Reuters contributed to this report.
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