Donald Trump intensified his longstanding conflict with Federal Reserve Chairman Jerome Powell as the President attacked him for not going for interest rate cuts and calling for his firing. Trump took to Truth social Truth Social on Thursday to vent his frustration and wrote, "Powell's termination cannot come fast enough!"
Trump slammed the Federal Reserve for adopting a cautious stance and delaying rate cuts after the central bank paused its monetary easing cycle in January. Trump anger and frustration were triggered by Powell's comments on Wednesday after the Fed Chair said that the hefty tariffs announced earlier this month could weigh on the economy's health and push it into recession.
Longstanding Conflict Heats Up
"Oil prices are down, groceries (even eggs!) are down, and the USA is getting RICH ON TARIFFS. Too Late should have lowered Interest Rates, like the ECB, long ago, but he should certainly lower them now," the President wrote on Truth Social.
Trump's comments were in response to the warning issued by Powell on Wednesday. Powell said that the tariffs were posing a big threat for the Federal Reserve as it was making the central bank's dual responsibility of keeping inflation steady at the same time ensuring a resilient labor market.
Powell said that the Federal Reserve needs to remain patient in its approach to monetary policy as Fed officials seek more clarity on Trump's trade policies before taking any major decision on interest rate cuts.
Powell hinted that the bar for future rate cuts remained relatively high and the Fed needs to take a cautious approach.
However, Trump, who has been repeatedly asking the Federal reserve to resume its rate cuts to give a boost to the economy, cited reports that show the European Central Bank (ECB) was gearing up for yet another rate cut.
"The ECB is expected to cut interest rates for the 7th time, and yet, '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!'" Trump wrote.
Powell Doesn't Want to Get Influenced
Trump has openly criticized Powell and vented his frustration but the central bank continues to claim that it wants to stay independent and does want to succumb to political pressure. Powell stressed on this principle once again in his Wednesday's speech, saying that the Fed's autonomy is a "legal obligation."
The Trump administration's recent actions have ignited fears among financial experts and policymakers that he might take more aggressive steps that could disrupt the Fed's autonomy.
Among the biggest concerns is that Trump could go to any extent fire Powell before his term ends in May 2026. In the past, the administration issued executive orders in a bid to enhance presidential control over the Federal Reserve's responsibilities, especially in terms of financial regulation.
Trump in his second term has already shown his intentions of interfering with the independence of other federal agencies after he fired hundreds of employees across agencies such as the Federal Trade Commission and the National Labor Relations Board.
