Powell may have a hard time avoiding Trump’s ‘Too Late’ label even as Fed

History suggests that President Donald Trump’s new “Too Late” nickname for Federal Reserve Chair Jerome Powell has a strong chance of coming true, though he’d hardly be alone if it does.

After all, central bank leaders have a long history of being too reluctant to raise or lower interest rates.

Whether it was Arthur Burns keeping rates too low in the face of the stagflation threat during the 1970s, Alan Greenspan not responding quickly enough to the dotcom bubble in the ’90s, or Ben Bernanke’s dismissal of the subprime housing prices as “contained” and not lowering rates prior to the 2008 financial crisis, Fed leaders have long been criticized as slow to act absent compelling data showing them something needs to be done.

So some economists think Powell, faced with a unique set of challenges to the Fed’s twin goals of full employment and low inflation, has a strong chance of wearing the “Too Late” label.

In fact, many of them think nothing is exactly what Powell should do now.

“Historically, go back and look at any Federal Reserve, and I’m going back into the ’70s, the Fed is always late both ways,” said Dan North, senior economist at Allianz Trade North America. “They tend to wait. They want to wait to make sure that they won’t make a mistake, and by the time they do that, usually it is too late. The economy is almost always in recession.”

However, he said that given the volatile policy mix, with Trump’s tariffs threatening both growth and inflation, Powell has little choice but to sit tight absent more clarity.

Powell is in a no-win situation, with threats to both sides of the Fed mandate, “and that’s why he’s doing the exact right thing at this moment, which is nothing, because one way or another it’s going to be a mistake,” North said.

Trump wants a cut

Though Trump said the economy probably will be fine no matter what the Fed does, he has been badgering the central bank lately to cut rates, insisting that inflation has been slayed.

In a Truth Social post after the Fed decision this week to keep rates unchanged, Trump declared that “Too Late’ Jerome Powell is a FOOL, who doesn’t have a clue.” The president declared there is “virtually NO INFLATION,” something that was true for March at least when the Fed’s preferred inflation gauge came in unchanged for the month.

However, the president’s tariffs have yet to be felt in the real economy, as they are barely a month old.

Recent economic data do not indicate price spikes nor a perceptible slowdown in economic activity. However, surveys are showing heightened worries in both the manufacturing and service sectors, while consumer sentiment has soured, and nearly 90% of S&P 500 companies mentioned tariff concerns on their quarterly earnings calls.

At this week’s post-meeting news…