U.S. Federal Reserve Chair Jerome Powell talked a lot during a press conference after a two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, D.C. on May 7, 2025. Kevin Lamarque | Reuters
President Donald Trump has given Powell a new nickname, “Too Late,” and many folks think it might actually stick. But hey, Powell wouldn’t be the first Fed chair to be a little slow on the uptake when it comes to adjusting interest rates.
From Arthur Burns in the ’70s to Alan Greenspan in the ’90s to Ben Bernanke before the 2008 financial crisis, Fed leaders have a habit of waiting too long to make changes. They like to play it safe, waiting for all the evidence to be crystal clear before they act. By then, it’s usually too late, and the economy is already tanking.
So, some experts are predicting that Powell, dealing with a tricky situation that could mess with the Fed’s goals of low inflation and full employment, might just end up with the “Too Late” label on his hands.
But you know what? Some economists think Powell should just chill for now and not do anything at all. Dan North, a senior economist at Allianz Trade North America, said, “Historically, go back and look at any Federal Reserve, and I’m going back into the ’70s, the Fed is always late both ways. 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.”
With Trump’s tariffs causing a ruckus and messing with both growth and inflation, Powell is kind of stuck between a rock and a hard place. North thinks Powell is making the right call by doing nothing because, either way, it’s going to be a disaster.
Trump, on the other hand, is pushing for rate cuts, despite saying things are going okay. He’s all over Powell, calling him a “FOOL” and saying there’s “virtually NO INFLATION,” even though it’s only been a month since the tariffs kicked in.
But here’s the thing: recent data doesn’t show any major price spikes or a slowdown in economic activity. However, surveys are showing that folks in the manufacturing and service sectors are getting antsy, consumer sentiment is dropping, and almost all S&P 500 companies are worried about those tariffs.
At the post-meeting news conference, Powell seemed pretty confident in the economy, calling it “solid” and saying the job market is looking good.
Despite all the noise, Powell is not in a hurry to make any moves. Krishna Guha, head of global policy and central bank strategy at Evercore ISI, thinks Powell’s reasons for waiting make sense, even though he might end up regretting it. Powell has a history of being late to the party, like when he didn’t raise rates quickly enough in 2021, and now he’s being cautious again.
Joseph LaVorgna, chief economist at SMBC Nikko Securities, thinks the Fed needs to be more proactive and not wait around for the perfect moment. He said, “If they’re waiting for the labor market to confirm whether they should cut rates, by definition they’re too late.”
But hey, who knows? The Fed might miss the mark yet again, thanks to their own history and the uncertainty around those tariffs. LaVorgna said, “We’re not going to know if it’s too late until it’s too late.”
The Fed has a habit of being a step behind, and it looks like history might repeat itself once more. Powell’s got a tough job ahead of him, and only time will tell if he ends up with that “Too Late” label after all.
