Washington [US], April 7: Not only has US President Donald Trump failed to find common ground on the policies of Federal Reserve Chairman Jerome H. Powell, but even a close associate of the White House owner, billionaire Elon Musk, has expressed disagreement.
After announcing the reciprocal tax policy, Mr. Trump called on Mr. Powell to cut the operating interest rate.
Inflation concerns
Specifically, writing on the social network Truth Social on April 4, President Trump wrote: "This is the perfect time for Fed Chairman Jerome Powell to cut interest rates. He has always been "late", but now he can change his image. Energy prices are down, interest rates are down, inflation is down, even egg prices are down 69% and jobs are up, all within two months. This is a big win for America . Cut interest rates, Jerome. And stop playing politics!".
His comments criticized Mr. Powell for not cutting the policy interest rate because of political intentions even though this is the right time. Meanwhile, the Fed Chairman still defends his concern about rising inflation, which is caused by President Trump's policies. Speaking on April 4, Mr. Powell emphasized the Fed's "obligation" to control inflation. He said that in the context of many uncertain signs in the economy, increasing import taxes could cause prices of goods to rise, causing inflation to rise again.
Since last year, the Fed has gradually cut its policy interest rate after a period of keeping it at a high level to deal with inflation. However, since the end of last year, the Fed has temporarily stopped cutting interest rates due to concerns that Mr. Trump's tax policy will cause inflation to return. Ever since Mr. Trump announced tax increases on China, Canada and Mexico - the leading trading partners accounting for more than 40% of total US import and export turnover , experts have warned of a return of inflation.
In an analysis sent to Thanh Nien, Eurasia Group (USA), the world's leading political risk research and consulting unit , warned: "A trade war could cause inflation and weigh on economic growth in the US, Canada and Mexico."
Analysts from financial groups Morgan Stanley and Goldman Sachs predict that US inflation will increase and economic growth will decrease. Even the GDPNow analysis model of the Federal Reserve Bank of Atlanta (USA) predicts that the US economy will not only not grow but may even decrease in the first quarter of 2025.
Reaction from "courtier"
Not only Mr. Powell but also billionaire Elon Musk - who is considered a strong assistant of Mr. Trump - also expressed disagreement with the White House's tax policy.
This was expressed when expressing his opinion on social network X on April 5, billionaire Musk criticized economist Peter Navarro - trade and manufacturing advisor, and "architect" of President Trump's tax policy. Specifically, a social network account X shared Mr. Navarro's interview on CNN that the US stock market's decline due to reciprocal taxes was only short-term and would soon recover. The author shared the above content along with that Mr. Navarro is a doctor of economics from Harvard University.
In response, billionaire Musk wrote: "A PhD in economics from Harvard is a bad thing, not a good thing." Explaining his opinion, the billionaire said that because he is a PhD in economics from Harvard, his actions are mainly based on "ego" and ignore reason.
When another account voiced that economist Navarro was right, billionaire Musk once again denied that: "He (Navarro - NV) did nothing." Meanwhile, Mr. Musk commented "agreeing" with another social network X account quoting American economist Thomas Sowell: "In every disaster throughout American history, there seems to be someone from Harvard."
Not only that, appearing online at a conference organized by Italian Deputy Prime Minister Matteo Salvini and the country's ruling far-right party on April 5, billionaire Elon Musk called on Europe and the US to form a tariff-free zone.
Since Mr. Trump took office, billionaire Musk has frequently voiced support for the White House's policies, but since the reciprocal tax policy was officially announced on April 2, billionaire Musk has been silent.
Source: Thanh Nien Newspaper
