Former Reagan economist Art Laffer said Monday on Fox Business’ “Kudlow” that Federal Reserve Chairman Jerome Powell’s refusal to lower interest rates makes him look like a “political hack trying to get” President Donald Trump “in any way he can.”
Despite repeated calls from Trump to cut rates, the Fed announced during its fourth meeting of 2025 in June that it would keep its target range at 4.25% to 4.5%. Fox’s Larry Kudlow — while discussing Powell’s recent move to request a review of the Fed headquarters’ renovation by the central bank’s inspector general — asked Laffer what he made of the chairman’s recent predicament. (RELATED: Trump Threatens Russia With Tariffs Over Ukraine War)
“Well, I don’t know about the truth before the Senate or any of that stuff, Larry, but I did watch Kevin Hassett [Trump’s top economic adviser] this weekend,” Laffer said. “And Kevin was exquisitely comprehensive on why the rate should be a one and a half percent lower than where they are right now, given the Fed’s criteria, its policies and what’s happening in Feds around the country.”
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“Powell has to be on the run. That building, the renovation and all that, all of it’s very, very bad optics. And the Fed thing looks like he’s just a political hack trying to get Trump in any way he can,” Laffer said.
In April, Trump imposed sweeping reciprocal tariffs on a handful of countries, prompting Powell, just days later, to express uncertainty about the potential economic impact. Despite speculation that Powell could be ousted for refusing to lower interest rates, Trump told reporters on April 22 that he had “no intention” of replacing him.
On July 1, Powell claimed during a panel that the U.S. central bank would have already cut rates if Trump had not imposed his “Liberation Day” tariffs. Following Powell’s remarks, Trump took to Truth Social, writing that it was the “perfect time” for Powell to cut rates and “stop playing politics.”
As tensions escalated between the president and Powell, reports circulated that Hassett and former Fed Gov. Kevin Warsh were among the top contenders to replace him, according to The Washington Post. Trump on July 2 reposted a Bloomberg article highlighting that the head of the Federal Housing Finance Agency called on Congress to investigate Powell.
“‘Too Late’ should resign immediately!!!” Trump wrote.
Since then, Powell has requested a review of the Fed’s $2.5 billion headquarters renovation project, following accusations that the central bank spent excessively on a lavish campus, according to Axios.
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