Trump and Powell Face Inflation, Egg Meat Crisis, and Trade Challenges

In the context of the US economy undergoing many fluctuations, direct dialogues between the White House and the Federal Reserve once again attract public attention. Despite President Donald Trump's reputation for unpredictability and public criticism, he still advocates for injecting his opinions into economic exchanges with Fed Chairman Jerome Powell, whom Trump doesn't particularly favor. A Close Meeting Between the White House and the Fed According to Kevin Hassett, a top economic advisor to Trump and Chairman of the National Economic Council, the meetings between the White House and Powell are held in the form of "regular intimate lunches". Hassett affirmed: “Jay is independent, and the independence of the Fed is always respected. However, the viewpoint of the President - the head of the country - also needs to be heard.” This meeting is not only an opportunity to exchange views on the economic situation but also to maintain the balance between the Fed's independent monetary policy and the White House's desires. Conflicting Views and Legal Threats In the 2024 election campaign, Trump publicly criticized Powell and called for a change in the head of the Fed if he did not "follow the Oval's will". However, Powell has maintained his position and even declared that he would sue if the President attempted to remove him unlawfully. The tension between the two sides is evident through harsh words, but behind it, there still exists a "colleague" relationship that helps both parties continue to exchange information discreetly. Inflation and Price Crisis - The 'Equation' of the US Economy Against the backdrop of the Consumer Price Index (CPI) rising 4.6% over the past three months, well above the Fed's 2% target, creating significant pressure on the economy. A typical example is the scarcity of eggs - a staple in every household. Hassett said, 'I just went to the supermarket to shop for the family, and found that there were very few eggs left on the shelf.' Economic experts, including those who have worked in the administration of President Biden such as Jason Furman and Larry Summers, have warned that excessive government spending will stimulate inflation. Hassett believes that the previous financial policies have created 'stagflation' - a combination of high inflation and slow economic growth. White House's Multidirectional Response Plan To address urgent economic issues, Trump's team is finalizing a series of measures, including: Tax reduction in the direction of increasing supply: Towards stimulating production and motivating businesses. Reduce public spending: Through measures to cut spending from the Government Expenditure Ministry (DOGE) and cooperation with the National Assembly. Enhance energy production: Along with policies to loosen regulations and create favorable conditions for the industry. Specific sectoral policies: Adjusted by sector to address specific shortcomings. Avian Influenza Pandemic For Poultry Industry and the "Egg Crisis" In addition to macroeconomic issues, another unexpected factor also contributes to consumer concerns: the outbreak of avian flu. Millions of chickens have been culled, leading to record egg prices. Hassett criticized the Biden administration's response, arguing that the 'mass slaughter' of chickens is not only ineffective but also overlooks the root cause - the spread of flu from ducks and geese. In response, the Trump administration is focusing on biosecurity and treatment drugs instead of large-scale slaughter. Interest Rate Policy and Trade War On the currency front, Trump continues to call for interest rate cuts, arguing that high interest rates have a negative impact on consumers. "Interest rates need to be lowered," Trump frequently emphasizes on his Truth Social platform. However, Powell and the Fed assert that they will maintain high interest rates until inflation is fully under control. On the other hand, Hassett points out that market interest rates have decreased by about 40 basis points in recent weeks, saving nearly $40 billion for the American people. In terms of commerce, Trump proposes applying corresponding taxes to countries that apply value-added tax (VAT) such as European countries and China. According to Hassett, while US businesses are paying about $370 billion in taxes to foreign governments, foreign businesses only pay about $57 billion to the US. The White House is currently conducting negotiations with international leaders, including UK Minister Reynolds, with the goal of recovering $5 trillion over the next 10 years. This money is expected to be used to reduce taxes and stimulate the economy. Conclusion Amidst many existing economic challenges such as inflation, commodity price crises, and international trade tensions, the dialogue between the White House and the Fed is not only a place for exchanging views but also a strategy to balance the independence of monetary policy and the urgent demands of the economy. Despite disagreements and conflicts in perspectives, the proposed multi-dimensional measures hold promise to help bring the US economy back on track towards sustainable development.