Trump lashes out at Fed chair for not cutting rates

President Donald Trump lashed out today at Jerome Powell, chair of the Federal Reserve, saying, “Powell’s termination cannot come fast enough!”

Trump’s ire followed remarks by Powell on Wednesday, when he warned in a speech that the president’s tariffs could create a “challenging scenario” for the central bank by putting its two main goals — stable inflation and a healthy labor market — in tension.

Powell reiterated that the Fed could afford to be patient with its interest rate decisions until it had more clarity about Trump’s policies. The Fed chair’s emphasis on the need to ensure that a temporary rise in inflation from tariffs did not become a more persistent problem suggested that the bar for further rate cuts was high.

The president has been pushing for Powell to cut rates since returning to the White House. He referred to expectations today that the European Central Bank would lower borrowing costs, saying the Fed should do the same.

“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 on his Truth Social platform. “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. Powell’s termination cannot come fast enough!”

The Fed seeks to operate independent of political influence, something that Powell on Wednesday said was a “matter of law.” He also said the Fed’s independence was “very widely understood and supported in Washington and in Congress where it really matters.”

Many legal experts agree that the president probably does not have the authority to fire the Fed chair over a policy disagreement, although that has not been tested in court. The president nominates members to the central bank’s Board of Governors, who are confirmed by the Senate and typically serve 14-year terms. From those members, the president nominates a chair to serve a four-year term.

“People can say whatever they want,” Powell said Wednesday. “That’s fine. That’s not a problem, but we will do what we do strictly without consideration of political or any other extraneous factors.”

Presidents have long sought to put pressure on central bank officials, but the fear across Wall Street and Washington is that Trump will seek to undermine the central bank’s independence in a more significant way.

The top concern is that he will try to remove Powell from his leadership position before his term as chair expires in May 2026. Trump has already signed an executive order trying to seize more control over the central bank’s responsibilities related to bank regulation. (The order exempted the Fed’s decisions on interest rates, which are voted on at every meeting by the seven members of the central bank’s Board of Governors and a rotating set of five presidents from regional reserve banks.)

Trump has also taken more direct aim at other independent agencies, including by firing officials at the Federal Trade Commission, the Merit Systems Protection Board and the National Labor Relations Board.

Earlier this month, Chief Justice John Roberts temporarily allowed the Trump administration to remove the leaders of two independent agencies while their challenges to the dismissals move forward in court.

The chief justice, acting on his own, issued an “administrative stay,” an interim measure intended to give the justices some time while the full Supreme Court considers the matter.

Powell on Wednesday said that he did not expect the court’s decision to apply to the Fed but that the central bank was “monitoring carefully” the situation.

Eswar Prasad, a professor at Cornell University, called Trump’s latest broadside at Powell and the Fed a “a stunning and deeply disturbing attack” that could erode America’s leading role in global financial markets. “Trump’s assault on the Fed’s independence, which is clearly just getting started, threatens to damage the Fed’s monetary policy credibility and unravel domestic and foreign investors’ faith in the dollar,” he added.

Trump spent much of his first term jawboning Powell and the Fed to cut rates, calling the Fed chair an “enemy” and central bankers “boneheads.” He also repeatedly threatened to fire Powell. While Trump elevated Powell to chair, the president soon soured on his choice as the Fed held rates steady. Powell was later renominated to a second term as Fed chair by the Biden administration.

After Trump won a second presidential term in November, Powell delivered a stern “no” when asked by a reporter if he would resign if the president asked him to.

He delivered a more emphatic response when pressed on whether the president had the legal authority to fire him. “Not permitted under the law,” Powell said.

Trump’s call for lower interest rates comes amid turbulence in financial markets. His tariff policies have rattled the bond market in particular, with the yields on Treasury bonds rising so sharply at one point that it prompted the president to back off and put a 90-day pause on many tariffs. These bonds are normally considered safe and stable assets, influencing how many other types of debt — including mortgages, credit cards and business loans — are priced.

The Fed sets a few short-dated interest rates that then ripple out across financial markets, but its influence is limited on key rates like those for the 10- and 30-year Treasurys, with yields largely set by the market.

Oil prices have been falling, recently trading near their lowest levels in nearly four years, reflecting deepening concern that tariffs could slow economic growth and perhaps even cause a recession. The cartel known as OPEC+ also said that it would pump more oil, beginning in May, setting off concern that supply may outstrip demand.

Egg prices at the grocery store have continued to climb, although at a slower pace in recent months. They rose 5.9% in March, according to the latest official statistics. Trump has not referred to retail egg prices, instead emphasizing the wholesale price of eggs, which has fallen by roughly half since the start of his second term.

Policymakers at the European Central Bank today cut rates for a seventh consecutive meeting, as optimism about an economic recovery in the eurozone has given way to concerns about the ramifications of Trump’s trade policies.

“The outlook for growth has deteriorated owing to rising trade tensions,” ECB policymakers said in a statement.

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This article originally appeared in The New York Times.

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