Trump and his top allies were quick to blast the Biden-Harris administration, the Federal Reserve and Fed Chairman Jerome Powell after Thursday's CPI data showed higher-than-expected inflation.

“The fact is, the Federal Reserve moved down rates a little too quickly,” Trump said during an appearance at the Detroit Economic Club on Thursday.

“The cuts are so big and everyone knows this is a political ploy they are trying to pull before the election,” he said.

It was the most direct criticism of Powell in months from Trump, who has often focused on blaming the economy for its slump rather than criticizing the Fed directly.

"This is entirely a political decision, and inflation is already starting to rise," Trump said Thursday, while also blaming high interest rates for "really killing the American dream for young people."

Make America Great Again, Inc., a pro-Trump super PAC, also issued a statement on Thursday saying Thursday's inflation data could be part of the "Federal Reserve's worst nightmare."

Overall, the Consumer Price Index (CPI) rose 2.4% year-on-year, down from 2.5% in the previous period.

But the lower annual CPI rate was largely masked by a 0.2% month-on-month increase in CPI in September, which was higher than the 0.1% expected by economists.

Democrats, including the Biden-Harris administration, chose to focus on the annual CPI rate in their response, with National Economic Advisor Lael Brainard saying in a statement that "the annual rate of inflation has fallen back to 2.4%, the same level as before the pandemic."

She added: “We are always improving.”

The FOMC will not meet again until after Election Day. Thursday’s inflation data appeared to provide new impetus to Fed hawks who have suggested a more gradual pace of rate cuts in the coming months.

Some initial reactions suggest the Fed’s strategy is unlikely to change, no matter what Trump says.

Max Kettner, chief multi-asset strategist at HSBC, said on Thursday that it was "almost a certainty" that there would be 25 basis point rate cuts at each of the last two meetings of the year.

However, after the CPI release, Atlanta Fed President Bostic said he was "totally comfortable" keeping interest rates unchanged next month, and he already expected only one more rate cut this year.

Trump's comments could mark a return to the political headaches Powell faces in 2024.

In August, Trump said he wanted to have a "say" in setting interest rates, suggesting the Republican candidate might seek to reduce the Fed's independence if he wins in November.

Earlier this year, Trump was even more direct in a June interview with Bloomberg, saying that rate cuts were "something they know they shouldn't do." Earlier, in a February interview with Fox Business, Trump said of rate cuts: "I think (Powell) might do something to help the Democrats."

But when the rate cut finally came, Trump's initial response was to focus on the economy.

“I think it’s indicative of how bad the economy is that they needed to cut it that much, assuming they weren’t just playing political games,” Trump said hours after the September rate cut.

However, he said in an interview with Newsmax a few days later, "This is a political move."

Article forwarded from: Jinshi Data