Kristina Roberts
Former US President Donald Trump has once again attacked Jerome Powell, the Chairman of the Federal Reserve, demanding that he cut interest rates right away. In a post on his social media platform, Truth Social, Trump called Powell a “major loser” and warned that the US economy could slow down if interest rates are not reduced soon.
Trump wrote, “‘Preemptive Cuts’ in Interest Rates are being called for by many.” He also claimed that there is “virtually No Inflation” in the US and that prices for energy and most other things are going down. He added, “With these costs trending so nicely downward, just what I predicted they would do, there can almost be no inflation, but there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW.”
This is not the first time Trump has criticized Powell, even though he was the one who appointed him as Fed Chair during his first term. Now, Trump and his team are reportedly looking into whether they can legally remove Powell from his position before his term ends in May 2026. However, Powell has made it clear that the law does not allow the president to fire him.
If Trump tries to remove Powell, it could cause big problems in the financial markets. Experts say that such a move could lead to a sharp drop in stock prices. One analyst mentioned that questioning the independence of the Federal Reserve would make it harder for them to cut interest rates. He said, “If you actually did try to remove the Federal Reserve chairman, I think you would see a severe reaction in markets with yields higher, dollars lower and equities selling off.” He also added, “I can’t believe that that’s what the administration is trying to achieve.”
The stock market has already been struggling due to uncertainty around Trump’s policies, including his plans for new tariffs. After Trump’s latest comments attacking Powell, the markets fell even further. The Dow Jones Industrial Average dropped more than 600 points, and the Nasdaq fell nearly 2.5% in early trading.
Many economists and financial experts believe that the Federal Reserve should remain independent from political pressure. They argue that if the government tries to control interest rates for political reasons, it could lead to long-term economic problems. The Fed’s main job is to keep inflation under control and ensure stable economic growth, and political interference could make that harder.
Trump’s aggressive approach toward the Federal Reserve is not new. During his first term as president, he often criticized Powell for raising interest rates, saying it was hurting the economy. Now, as he campaigns for another term, he is once again putting pressure on the Fed to lower rates, claiming it will help boost economic growth.
However, some analysts say that cutting interest rates too soon could backfire. If inflation starts rising again, the Fed may have to raise rates even higher later, which could slow down the economy more than expected. Right now, the Fed is carefully watching economic data before making any decisions on rate cuts.
Powell has repeatedly stated that the Fed will make decisions based on what is best for the economy, not because of political pressure. He has emphasized that the central bank’s main focus is to prevent inflation from getting out of control while supporting job growth.
The ongoing tension between Trump and Powell has raised concerns among investors. Many worry that if political battles continue to influence economic policies, it could create instability in the markets. Some fear that Trump’s comments could shake confidence in the US financial system, especially if he tries to take extreme steps against the Fed.
For now, Powell remains in his position, and the Federal Reserve continues to operate independently. But with Trump pushing hard for lower interest rates, the situation could become more complicated in the coming months. Investors will be watching closely to see how this conflict develops and what it means for the economy.
The debate over interest rates is not just about economics—it’s also about power and control. Trump wants the Fed to act quickly to support his economic agenda, while Powell insists on following data and maintaining stability. This clash highlights the challenges of balancing politics and economics, especially in an election year.
As the 2024 presidential race heats up, Trump’s attacks on the Federal Reserve could become a major talking point. His supporters may agree that lower interest rates would help the economy, while critics argue that undermining the Fed’s independence could do more harm than good.
For everyday Americans, the outcome of this battle could affect everything from mortgage rates to job growth. If the Fed cuts rates, borrowing money could become cheaper, which might help businesses and homebuyers. But if political pressure leads to bad decisions, it could hurt the economy in the long run.
The situation remains uncertain, but one thing is clear: Trump is not backing down from his demand for lower interest rates, and Powell is standing firm on the Fed’s independence. How this conflict plays out could have big consequences for the US economy and financial markets.
As the debate continues, experts urge caution, reminding everyone that the Federal Reserve’s decisions should be based on solid economic data, not political demands. The coming months will be crucial in determining whether the Fed can maintain its independence or if political pressure will force a change in direction.
For now, all eyes are on Powell and the Federal Reserve as they navigate these challenging waters. Investors, politicians, and ordinary citizens will be watching closely to see what happens next in this high-stakes economic battle.
