- Trump calls for Powell’s immediate resignation over rate policy.
- Powell blames Trump tariffs for delaying cuts.
- Political and market implications of Fed chair turmoil.
Trump Sparks New Feud with Fed Chief
Former President Donald Trump reignited tensions with the Federal Reserve, publicly calling for Chair Jerome Powell to “resign immediately.” His statement came after new scrutiny of the Fed’s headquarters renovation and accusations of deceptive testimony by Powell. Trump’s sharp post on Truth Social labeled Powell as “Too Late,” a jab at what he sees as the Fed’s sluggish response to economic needs.
Interest Rates at the Center of Dispute
The heart of Trump’s frustration lies in the Fed’s decision to maintain high interest rates, currently between 4.25% and 4.5%. Trump has argued for deep cuts, potentially down to 1%, claiming current rates are damaging to the economy and costing the U.S. “a fortune.” This is not a new stance from Trump, who has consistently pressured the Fed for looser monetary policy.
Powell Fires Back, Cites Tariffs
Jerome Powell, defending the Fed’s actions, pointed to inflation driven by tariffs from Trump’s presidency as a major reason for the cautious approach. Speaking at a European Central Bank forum, he said the Fed paused rate cuts to assess inflation impacts. He emphasized that the central bank remains focused on economic data, not political pressure.
What’s at Stake
Although Trump can’t directly remove Powell without cause, reports suggest he’s preparing to replace him early if re-elected. Names like Christopher Waller and Kevin Warsh are already being floated as possible successors. Analysts warn that such moves could erode confidence in the Fed’s independence and unsettle financial markets.
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