Trump, in a post on his social media platform Truth Social, reiterated his stance on rate cuts, saying that Powell “should have lowered interest rates, like the European Central Bank, long ago, but he should certainly lower them now”.
The Fed’s benchmark interest rate is currently 4.25-4.50 percent, where it has been since December following several rate cuts late last year.
Trump’s comments come a day after Powell said at an event at the Economic Club of Chicago that the Fed’s “independence is very widely understood and supported in Washington and in Congress where it really matters,” drawing applause from the high-level group of business executives for a pledge to set interest rates independent of political pressure or partisan considerations.
Trump has at times threatened to try to fire Powell, as he is attempting to do with members of other independent policy bodies in a move currently before the US Supreme Court.
Powell on Thursday said the Fed is watching the case carefully but does not think any decision will apply to the central bank, whose credibility in managing monetary policy is considered important not just to the US economy, but in global markets tuned to Fed decisions.
Powell’s term as chair expires in May, 2026, regardless. It was unclear from Trump’s language whether he is resigned to waiting that time out, or hoping for a Supreme Court decision that lets him remove Powell sooner.
Trump in his post said Powell was “always too late and wrong”, and critiqued the speech Powell made on Wednesday, calling it “another, and typical, complete mess”!
Powell on Wednesday warned Trump’s tariff policies risked pushing inflation and employment further from the central bank’s goals, which it manages jointly under a mandate from Congress. (Reuters)
