Trump says he has “no intention of firing” Federal Reserve chief Jerome Powell
President Trump made headlines on Tuesday when he stated that he has “no intention of firing” Federal Reserve chair Jerome Powell. This statement came after the president publicly criticized Powell, calling him a “major loser” and urging the central bank chief to lower interest rates at a faster pace. Despite the heated exchange, Trump clarified that he never had any plans to dismiss Powell and accused the media of sensationalizing the situation.
In the Oval Office, Trump emphasized that now is the perfect time to lower interest rates, citing the need for economic stimulus. However, he also noted that if Powell chooses not to do so, it would not be the end of the world. This comes after Trump’s recent social media post where he lambasted Powell for being “always TOO LATE AND WRONG” and expressed his desire for Powell’s termination.
The ongoing feud between Trump and Powell stems from the Federal Reserve’s decision to maintain steady interest rates this year after a period of rate cuts in late 2024. Trump believes that lowering interest rates further would spur economic growth and reduce borrowing costs for businesses and consumers. However, Powell has cited “uncertainty” as the reason for the Fed’s cautious approach, warning about the potential impact of tariffs on inflation and economic growth.
The possibility of Trump trying to oust Powell has raised concerns about the independence of the Federal Reserve. Maintaining independence allows the Fed to make decisions based on economic factors rather than political pressure. The stock market reacted to the uncertainty, with stocks slumping on Monday before rebounding on Tuesday.
In a statement, White House press secretary Karoline Leavitt defended Trump’s right to express his views on interest rates and criticized the Fed for allegedly making decisions based on political motives. However, experts have warned that undermining the Fed’s independence could have negative consequences, including higher inflation and slower economic growth.
Despite the ongoing tensions, Powell has remained firm in his position, stating last year that he would not step down if asked by Trump. The future relationship between Trump and Powell remains uncertain, as the administration continues to explore the legal implications of potentially removing Powell from his position. The battle between the president and the central bank chief underscores the importance of an independent Federal Reserve in making crucial economic decisions.
