Economist Peter Schiff is calling out President Donald Trump’s blatant hypocrisy on the Federal Reserve’s interest rate policy, saying that his demands and behaviors mirror what he had himself condemned in the past.
What Happened: On Sunday's episode of The Peter Schiff Show, Schiff addressed Trump's latest remarks about Fed Chair Jerome Powell, whom Trump recently described as holding “the easiest job in the world.”
This comes amid repeated calls by Trump to cut interest rates, despite concerns surrounding tariff-related inflation in recent months.
See Also: June Inflation Data Validates Powell’s Trump Pushback
According to Schiff, Trump's demands mirror the exact behavior he once condemned. “When Donald Trump ran for president the first time, he called out Janet Yellen for leaving interest rates too low. He accused her of being political, of trying to help the [former President Barack] Obama administration by artificially boosting the economy with low interest rates,” Schiff said.
Schiff then highlights the fact that this is exactly what he now wants Powell to do, which he refers to as “another example of the Trump hypocrisy.”
He does, however, acknowledge the consistency Trump shows in such behavior, saying that “He’s a hypocrite, but he is consistently hypocritical.”
Schiff pushed back against Trump’s demands for 1% interest rates, a position that he finds incoherent with the current state of inflation, and Trump’s own assessment of strength in the economy. “If the economy is this strong, why should interest rates be at 1%?” he asks.
Schiff also warned that Powell's departure could damage perceptions of Fed independence. He criticized suggestions that the Fed Chair and Treasury Secretary should formally partner, calling it “a dangerous step” that could make it appear as though the central bank is politically captured.
“That is the danger, I think that Trump is pushing with his constant attacks,” Schiff said.
Why It Matters: This comes amid growing speculation of Trump ousting Powell “for cause” regarding the Fed’s $2.5 billion headquarters renovation project.
Fed Governor Christopher Waller recently said he would accept the Fed chair role “if the president asks,” while also backing a rate cut as early as July. That comment has raised concerns about political influence over central bank decisions, exactly the kind of dynamic Schiff warns would undermine the Fed's independence.
Recently, Schiff has warned about this repeatedly in recent months, saying that after Powell, Trump’s pick for the Federal Reserve Chair will be a “loyal soldier.” He says, “Trump will likely nominate the most dovish replacement to ever chair the Fed.”
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