Former President Donald Trump is pounding the table again, demanding that the U.S. Federal Reserve reduce interest rates to zero immediately. His appeal follows the surprise jobs report for April — a gain of more than 250,000 jobs. In a post on Truth Social, Trump expressed his concerns about inflation and urged the Fed to take action, stating that “consumers have been waiting for years to see pricing come down.”
And yet, the April jobs report, despite showing incredibly strong hiring numbers should otherwise inspire a great deal of confidence in stability. Funnily enough, during the GOP primary, Trump himself made lowering rates front and center. He wasn’t alone in claiming that the Fed’s prevailing approach obstructs economic growth. “NO INFLATION, THE FED SHOULD LOWER ITS RATE!!!” he asserted in his post shortly after the jobs data was published.
Trump’s frequent attacks on Jerome Powell, chair of the Federal Reserve, have been one of the more remarkable features of Trump’s post-presidency speechifying. He regularly goads Powell to cut interest rates. Powell is claiming that the president doesn’t have the authority to fire him legally, and he therefore cannot be fired before his current term runs out in May 2026. Trump has consistently signaled, through leaks and the press, that he has “no intention” of firing Powell. He has repeatedly expressed anger at Powell’s record.
In recent months, Trump has scaled back his harsh criticisms of Powell, stating, “I want to be very nice and respectful to the Fed.” Even with this friendlier tack, he still insists that he knows more about interest rates than Powell. “I know much more than he does about interest rates, believe me,” Trump remarked.
So far, market reactions to Trump’s comments and intentions have been decidedly confounding. After his reappointment call for higher rates, stock futures plunged. On April 21, news that Trump had been plotting to remove Powell led to a sell-off. Consequently, both of the major indexes and the U.S. dollar were sent reeling. This trend raised concerns among investors about whether Trump might attempt to replace Powell with someone more amenable to political pressures on monetary policy.
After all, according to other reports, the White House had already considered the legal options under which Trump could fire Powell. This too has stoked fears in the financial markets over protecting the independence of the central bank from the whims of the White House. Trump’s ongoing efforts to sway the Federal Reserve’s decision-making process could risk undermining this critical separation of powers.
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