President Donald Trump intensified his criticism of Federal Reserve Chairman Jerome Powell on Thursday, calling for his removal amid frustration over what he sees as the Fed’s reluctance to lower interest rates.
Posting on Truth Social, Trump lashed out: “Powell’s termination cannot come fast enough,” just a day after Powell made clear that the central bank would stay the course and not rush to cut rates.
Speaking at an Economic Club of Chicago event, Powell—who was originally chosen for the role by Trump—voiced concerns that increased tariffs could drive inflation higher and harm the broader economy.
In his online rant, Trump fumed: “‘Too Late’ Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete ‘mess!’”
Later that day, Trump extended his attack during a meeting at the White House with Italian Prime Minister Giorgia Meloni.
“The Fed really owes it to the American people to get interest rates down. That’s the only thing he’s good for,” Trump stated. “I am not happy with him. If I want him out of there he’ll be out real fast believe me.”
According to the Wall Street Journal, Trump has been discussing the possibility of firing Powell in private for several months. These conversations reportedly included former Federal Reserve Governor Kevin Warsh, whom Trump is considering as a potential successor.
However, Warsh is said to have advised Trump against ousting Powell, urging that the Fed chief should be allowed to finish his term undisturbed, according to sources cited by the Journal.
The legality of removing Powell remains murky, as Fed chairs are nominated by the president but must also be confirmed by the Senate, and they traditionally serve full terms.
A Supreme Court case regarding a president’s authority to dismiss members of independent agencies could potentially affect the Fed as well, though Powell said Wednesday he believes that any ruling would not disrupt the Fed’s autonomy in setting monetary policy—a principle that enjoys widespread bipartisan backing.
Despite Trump’s claim that Powell would step aside if asked, Powell has made it clear that he has no intention of resigning before his term ends in May 2026.
The situation has become serious enough that Treasury Secretary Scott Bessent has reportedly advised officials within the administration to tread carefully, warning that attempting to oust Powell could send shockwaves through financial markets, according to Politico.
“A sudden crystallization of the threat to Fed independence would both intensify market stress and shift it in more of a stagflationary direction with a sharp increase in tail risk,” wrote Krishna Guha, vice chair of Evercore ISI, in a market note.
During his Chicago appearance, Powell urged a cautious approach when it comes to interest rates, emphasizing the need for more clarity on the administration’s trade policies before making further monetary moves.
The Fed’s main interest rate currently stands at 4.25% to 4.50%, unchanged since December after a series of rate cuts last year.
Speaking to Fox Business on Thursday, New York Fed President John Williams remarked, “I don’t see any need to change the setting of the fed funds rate anytime soon…It’s really about collecting information, understanding better what’s happening in the economy during the rest of this year, understanding kind of how the uncertainty plays out.”
“I think we have a period of higher inflation this year and a slower growth path for this year relative to last year. So that’s a combination you have to think carefully about,” Williams added.
Trump’s first term was marked by frequent clashes with Powell, whom he often denounced publicly, at one point calling him an “enemy” and mocking Federal Reserve officials as “boneheads.”
Their tensions escalated as the Fed resisted Trump’s push for aggressive rate cuts, which he viewed as necessary to fuel economic expansion.
Powell, who previously worked in private equity, was renominated to his current position by Joe Biden in 2022.
{Matzav.com}