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Trump Criticizes Jerome Powell, Demands His Removal as Fed Chair Over Interest Rate Policies
Trump Blasts Powell for Delayed Action on Interest Rates :
On April 17, 2025, President Donald Trump launched a scathing attack on Jerome Powell, the Chair of the U.S. Federal Reserve, over the central bank's stance on interest rates. In a post on his Truth Social platform, Trump described Powell as “always too late and wrong,” accusing him of failing to act swiftly in lowering interest rates. Trump’s frustrations were sparked by Powell's cautious approach, particularly when compared to the European Central Bank (ECB), which was preparing to cut interest rates for the seventh time this year.
Trump, who appointed Powell as Federal Reserve Chair in 2018, voiced his displeasure, calling for Powell's termination, stating that it "cannot come fast enough." He criticized Powell for not taking action sooner, especially when he believes the U.S. economy is in a position to benefit from a more aggressive monetary policy. Trump emphasized that prices for commodities such as oil and groceries (including eggs) were dropping, and he argued that the U.S. was benefiting from his tariff policies, suggesting that the Fed should have lowered rates earlier to support further growth.
The Tension Between Trump's Trade Policies and the Fed’s Approach
Trump’s criticism of Powell coincides with the ongoing tension between his trade policies and the Federal Reserve's efforts to control inflation. The U.S. president has been pushing for aggressive tariff strategies since returning to office in January 2025. However, Powell and other economic experts have warned that Trump's tariffs are likely to push inflation higher, complicating the Fed's decision-making process regarding interest rates. In fact, Powell recently acknowledged that the tariffs could create "at least a temporary rise in inflation" and even more persistent inflationary effects in the future.
This conflict became particularly noticeable when the ECB announced plans to cut rates in response to global economic instability caused, in part, by Trump’s fluctuating tariff policies. While Powell has held interest rates steady at 4.25% to 4.5% since the start of the year, Trump believes these rates are too high to stimulate economic growth and that a reduction could support stronger market conditions.
Trump’s Criticism of Powell’s Timing and Decision-Making
In his post, Trump compared Powell’s actions unfavorably to those of the ECB, accusing the Fed Chair of consistently acting "too late." He suggested that Powell's hesitation in cutting interest rates was holding back the U.S. economy, especially when global competitors like the ECB were already taking decisive steps. Trump made the case that if the ECB could continue to lower rates, the Federal Reserve should follow suit to avoid lagging behind in supporting economic growth.
Trump also pointed out that the economic effects of his tariffs, while controversial, were benefiting the U.S. He argued that tariffs were making the country "rich" and claimed that the falling prices of goods such as oil and groceries demonstrated that inflation was under control.
The Legal and Political Challenges to Removing Powell
Despite Trump’s calls for Powell’s removal, the Federal Reserve Chair's position is protected by law, and the president cannot remove him without cause. Powell’s appointment was confirmed by the Senate, and his current term is set to last until 2026, unless he chooses to resign. While Trump’s criticism of Powell is harsh, the Fed’s independence is a key factor in ensuring that monetary policy remains free from political pressures, which helps to maintain economic stability in the long term.
The Broader Debate: Inflation, Recession, and Economic Policy
Trump’s calls for a more aggressive economic strategy, including lower interest rates and tariff policies, have sparked a broader debate about the U.S. economy. While Trump pushes for more proactive policies, Powell and other economic experts warn about the risks of rising inflation and a potential recession if interest rates are lowered too quickly. In recent months, Wall Street has been forecasting a higher likelihood of recession, especially as the volatility caused by Trump’s tariffs continues to affect global trade.
As tensions continue between Trump’s trade policies and the Fed’s approach to managing inflation, the central bank faces increasing pressure to balance economic growth with price stability. The outcome of this ongoing conflict could have significant implications for the future of the U.S. economy.
