Trump attacks the Federal Reserve and demands the dismissal of its chairman

Barcelona / MadridUS President Donald Trump has just declared war on the Federal Reserve (Fed). In a message published This Thursday on the Truth Social network, Trump has demanded the firing of the chairman of the US central bank, Jerome Powell, and called his reports a "complete disaster." In addition, in his message, the US president demands that the Fed lower interest rates. "Jerome Powell, like the ECB [European Central Bank], should have lowered interest rates long ago. He should certainly do so now. Powell's firing cannot wait," Trump wrote. The US president asserted that Powell "always arrives too late and is wrong."

According to the agency Bloomberg, Powell's term as Fed chairman is scheduled to run until May 2026, while as governor it is until spring 2028. In recent months, the White House has fired senior officials at the Federal Trade Commission and the National Labor Relations Board.

Trump's words, however, do not come at any random time. To begin with, his tariff policy and the resulting trade tensions have brought with them The European Central Bank is expected to approve a new interest rate cut this Thursday., which are already at 2.25%. Furthermore, the message comes after the Federal Reserve chairman reiterated on Wednesday that the central bank must ensure that tariffs do not trigger a more persistent rise in inflation before making any decision on interest rates. Powell said during a speech at the Economic Club of Chicago. Powell emphasized that the level of tariff increases announced so far is significantly higher than expected and stated that "it is very likely that they will generate at least one increase. Avoiding this outcome will depend on the magnitude of the effects, the time it takes for them to fully translate into prices, and ultimately, whether longer-term inflation expectations remain well-anchored," he reflected. "Without price stability, extended periods of strong labor market conditions cannot be achieved. Impact on trade

The fact that the tariff war will have an impact on world trade and, therefore, on prices is not only of concern to the ECB and the IMF, which has already warned that it will lower its growth forecasts for the global economy. This Wednesday, the World Trade Organization (WTO) indicated that there is a "high risk" that the expected impact on world trade will multiply. Specifically, if current conditions persist, in which a 90-day tariff truce has been declared with the exception of China, trade volume will decline by 0.2% this year, the international organization indicated. However, the existing "strong downside risks" could lead to a decline of up to 1.5% in world trade. The most affected countries would be the least developed and export-oriented. In the latest report by World Trade Outlook and Statistics, Published this Wednesday, the WTO also forecasts a particularly exaggerated decline in North America, where it estimates that exports will fall by 12.6%.

The Trump administration's declaration of a tariff war became a reality the day the reciprocal tariffs were announced, those intended to respond, according to the president himself, to "unfair or discriminatory" taxes, such as the European VAT. It is precisely because of the possible reactivation of these same tariffs that the WTO now assures that the risks to the forecast of world trade persist.

For the moment, US tariffs are frozen at 10% during the 90-day pause for countries that have not announced retaliation. "If implemented, reciprocal tariffs would reduce world merchandise trade volume growth by 0.6 percentage points in 2025, while the spread of trade policy uncertainty could reduce it by another 0.8 percentage points," the WTO said. Overall, this would lead to a 1.5% decline in world merchandise trade in 2025.