Former President Donald Trump has laid into Federal Reserve Chairman Jerome Powell with increasing severity. He labelled Powell a “big loser” and is calling for immediate action to get interest rates down. In a series of posts on Truth Social, Trump warned that the U.S. economy could face a slowdown unless rates are cut without delay.
Trump seemed certain, for instance, when he asserted that inflation has all but disappeared under the current economy. He described how energy prices—and the prices of “pretty much everything else”—are going down, not up. In particular, he called for “Preemptive Cuts” in interest rates to foster economic growth. His remarks come amidst a backdrop of disorder in the financial markets. The Dow Jones Industrial Average tanked more than 600 points immediately after opening, and the Nasdaq index fell nearly 2.5%.
Second, costs are coming in well under budget, just as I always said they would. Under this trend, it would be nearly impossible for inflation to happen. Trump stated. He continued, “but there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW.”
Thank Trump’s unshakable Powell So far, Trump has succeeded. He appeals to the memory of those formerly mighty – and reminds us that the president cannot legally remove him from office. Powell, whom Trump appointed to the Fed during his first term, has criticized the tariffs imposed through Trump’s trade war. He thinks these tariffs will have an opposite effect, crippling economic growth and perhaps even increasing inflation. He noted that tariffs are “likely to move us further away from our goals… probably for the balance of this year.”
Powell has signaled a wait-and-see attitude toward further interest rate hikes. “For the time being, we are well positioned to wait for greater clarity before considering any adjustments to our policy stance,” he remarked.
Trump’s team is reportedly examining whether it is legally feasible to remove Powell before his term concludes in May 2026. Many experts worry that if someone did, it would result in huge upheaval of the markets. Krishna Guha aptly pointed out the biggest risk. As he put it, “Once you begin to call into question Federal Reserve independence, I think you’re raising the bar for the Federal Reserve to cut.” If you ever tried to oust the Federal Reserve chairman, markets would punish you brutally. You’d almost certainly witness yields go up, the dollar go down, and a sharp sell-off in equities.
And the current economic scenario has already been complicated by the U.S. dollar’s plummet to its lowest point since 2022. These unprecedented developments have sparked significant concern over the Fed’s monetary policy and its capacity to lead during severe turbulence and uncertainty.
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