Kristina Roberts
Former US President Donald Trump has once again called for a reduction in interest rates, blaming Federal Reserve Chair Jerome Powell for not taking the right steps. During a recent discussion with reporters, Trump expressed his frustration, saying that if Powell knew what he was doing, interest rates would have already been lowered.
“If we had a Fed Chairman that understood what he was doing, interest rates would be coming down too,” Trump said. “He should bring them down.”
Trump has repeatedly argued that the Federal Reserve, which controls the country’s monetary policies, should cut interest rates to help the economy. His latest comments come as his administration has increased its criticism of Powell in recent days.
White House economic adviser Kevin Hassett mentioned on Friday that Trump and his team are looking into whether they have the power to remove Powell from his position. Powell, however, has stated in the past that the law protects him from being fired and that he plans to remain in his role until his term ends in May 2026.
“The president and his team will continue to study that matter,” Hassett said when asked if firing Powell was now a possibility.
Trump’s anger toward Powell became even more evident when he posted on his social media platform, Truth Social, saying, “Powell’s termination cannot come fast enough.” In the same post, he referred to Powell as “Too Late,” continuing his habit of giving mocking nicknames to political opponents.
The use of the word “termination” raised questions about whether Trump was suggesting an early removal of Powell from office. Hassett later clarified that the administration would examine if any new legal interpretations could allow such an action.
Powell had earlier upset Trump when he commented on the president’s proposed tariff policies. He warned that these tariffs could increase inflation in the short term and make it harder for the Federal Reserve to balance its goals of maintaining high employment and stable prices.
“We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension,” Powell said during a speech at the Economic Club of Chicago. “If that were to occur, we would consider how far the economy is from each goal, and the potentially different time horizons over which those respective gaps would be anticipated to close.”
Powell also mentioned that the Federal Reserve is in a good position to wait and gather more information before making any changes to its current policies.
The Federal Open Market Committee, which decides interest rates, has kept them steady between 4.25% and 4.5% since December. According to financial market predictions, there is a more than 90% chance that the Fed will leave interest rates unchanged in its next meeting.
As Trump and his team continue to criticize Powell, some Democrats have come to the Fed Chair’s defense. Senator Elizabeth Warren of Massachusetts warned that if a president were allowed to fire the head of the Federal Reserve, it could have disastrous effects on the US financial markets.
“Understand this: If Chairman Powell can be fired by the president of the United States, it will crash markets in the United States,” Warren said.
The ongoing tension between Trump and Powell highlights the challenges of maintaining an independent Federal Reserve while dealing with political pressures. Many experts believe that the central bank should remain free from political influence to make the best decisions for the economy.
Trump’s push for lower interest rates is part of his broader economic strategy, which focuses on boosting growth through monetary policy changes. However, economists argue that the Federal Reserve must balance short-term economic benefits with long-term stability, which sometimes means keeping interest rates steady even when politicians demand cuts.
The debate over interest rates is not new. Past presidents have also expressed frustration with the Federal Reserve’s decisions, but Trump’s public criticism of Powell has been unusually direct. Some analysts worry that such attacks could undermine confidence in the Fed’s independence, which is crucial for maintaining stability in financial markets.
For now, Powell remains committed to his role, and the Federal Reserve continues to monitor economic data before making any policy changes. The outcome of this conflict could have significant implications for the US economy, affecting everything from inflation to job growth.
As the situation develops, investors and policymakers will be watching closely to see if Trump’s pressure leads to any shifts in the Fed’s approach or if Powell holds firm in his current stance. One thing is certain—the relationship between the White House and the Federal Reserve will remain a key topic in economic discussions for the foreseeable future.
The broader question is whether political interference in central banking decisions could set a dangerous precedent. Historically, the Federal Reserve has operated independently to avoid short-term political influences that might harm the economy in the long run. If that independence is weakened, it could lead to greater market instability and uncertainty.
Meanwhile, businesses and consumers are caught in the middle, waiting to see how these high-level decisions will impact loans, mortgages, and overall economic growth. For now, the Federal Reserve’s cautious approach suggests that no major changes are coming immediately, but the pressure from the White House ensures that this debate is far from over.
In the end, the balance between political demands and economic stability remains delicate. The decisions made in the coming months could shape the US economy for years to come, making this one of the most critical financial debates of the year.
