Fed Chair Faces Backlash from President Trump for Not Cutting Interest Rates
President Donald Trump called for the termination of Federal Reserve Chair Jerome Powell for waiting to cut interest rates, and planning to do so “too late” while prices on oil and groceries are reportedly down. The President expressed his eagerness for Powell’s termination as well in a Truth Social post on Thursday.
The President’s remarks were prompted after Powell delivered a Wednesday address to the Chicago Economic Club. During the address, the Fed Chair stated his concern with the current direction of the US economy and possible consequences posed by certain economic policies. He particularly addressed tariffs:
“Tariffs are highly likely to generate at least a temporary rise in inflation… The inflationary effects could also be more persistent,” Powell stated.
Inflation has decreased, he further noted, but is still above the 2 percent objective.
Concerning interest rates, Powell stated the Fed’s stance of waiting before making any changes:
“For the time being, we are well positioned to wait for greater clarity before considering any adjustments to our policy stance.”
President Trump nominated Powell to Chair of the Federal Reserve during his first term in 2018, which was renewed by President Joe Biden in 2022. Powell’s current term as Chair will end in 2026, though his secondary role as a Fed Governor lasts until 2028. On Thursday, Trump told reporters at the White House of his frustration with Powell, and that the Fed Chair will leave his position if the President asks him:
“Oh, he’ll leave. If I ask him to, he’ll be out of there. I don’t think he’s doing the job. He’s too late. Always too late. A little slow. And I’m not happy with him. I let him know it.”
The US Federal Reserve sets interest rates independently of the federal government. According to The Hill, Powell has said he will not step down from his role if Trump asks him. He said it is “not permitted under the law” for the US president to make any terminations or demotions concerning leadership positions within the Federal Reserve.
