In an early morning post on his social media platform Thursday, President Trump harshly criticized Federal Reserve Chairman Jerome Powell and indicated that he may try to fire the nominally independent central bank leader.
Powell said Wednesday that he is in no hurry to cut interest rates in an economy being buffeted by Trump’s unprecedented tariff hikes, which could increase inflationary pressure even as they drag on growth, but the president made it clear that he wants to see interest cuts immediately.
Referring to the Fed chief as “‘Too Late’ Jerome Powell” while claiming that his view of the economy is a “typical, complete ‘mess,’” Trump argued that with oil prices down and the country “getting RICH ON TARIFFS,” it was time for the Fed to lower rates, following the lead of the European Central Bank, which cut rates again today (see more on the ECB below). Trump cited lower grocery and egg prices as a reason to cut rates, too, but grocery prices rose last month and egg prices hit record highs.
“Too Late should have lowered Interest Rates, like the ECB, long ago, but he should certainly lower them now,” Trump wrote.
Trump also suggested that he may fire the Fed chief, saying, “Powell’s termination cannot come fast enough!”
A long-simmering anger: Powell was appointed by Trump to lead the Fed in 2018, and his current term runs until May 2026. The Fed is generally seen as apolitical and independent, with the president lacking the authority to remove its top officials, but during his first term Trump hinted that he may fire Powell, who he picked to replace Janet Yellen. At the time Trump voiced a similar complaint about interest rate policy, at one point saying Powell may be a bigger enemy of the U.S. than China's president, Xi Jinping.
Asked about the possibility of Trump removing him from his position, Powell said last year that he would not resign even if Trump asks him to leave, and that the removal of top Fed officials is “not permitted under the law.” He repeated that claim Wednesday, saying, “Our independence is a matter of law. We’re not removable except for cause.”
However, according to a new report from The Wall Street Journal's Brian Schwartz and Nick Timiraos, Trump has been talking for months about getting rid of Powell and replacing him with former Fed governor Kevin Warsh.
Warsh has reportedly cautioned against firing Powell and advised Trump to allow him to serve out his term. Any effort to remove Powell prematurely would likely be challenged legally, and the dispute could end up before the Supreme Court. Some have speculated that the Trump administration would welcome the dispute, with the hope that the high court would back the president and thereby expand his control over other nominally independent federal agencies and officials.
Asked about Powell this afternoon, Trump accused the Fed chief of “playing politics” with interest rates and insisted that he had the power to remove him. “If I want him out, he’ll be out of there real fast, believe me,” he told reporters in the Oval Office.