President renews attacks over interest rate stance
In recent months, President Trump has dismissed the idea of firing Federal Reserve chair Jerome Powell despite a series of high-profile disputes between the pair. But he's reignited the question ober the past week, signaling a renewed willingness to consider attempting to relieve Powell of his post.
On Friday, Trump criticized Powell sharply for holding interest rates steady, calling him a “Total and Complete Moron” in a Truth Social post.
“Maybe, just maybe, I’ll have to change my mind about firing him?” Trump wrote, before adding, “But regardless, his Term ends shortly!”
Though Trump appointed Powell in 2018, the president has since turned critical over the central bank’s reluctance to cut interest rates more aggressively. A CBS News report highlighted that Trump argued that lower borrowing costs would accelerate economic growth. The Fed, however, has maintained its benchmark interest rate in the 4.25%–4.50% range to avoid reigniting inflation.
Dismissal legally murky
Whether Trump can fire Powell remains a matter of legal debate. Under federal law, Fed board members can only be removed “for cause.” A Supreme Court decision in May, while expanding presidential power to dismiss leaders of some agencies, explicitly protected the Fed’s unique independence by defining it as a “quasi-private entity.”
Powell has previously said he would not resign if asked to step down. The two men met at the White House last month, though details of their conversation remain undisclosed.
Despite Trump’s repeated criticism—calling Powell “a dumb guy” and “Mr. Too Late”—he said on June 12 that he had “no intention” of firing him.
Interest rate policy in spotlight
Trump’s frustrations stem largely from the Fed’s recent decisions. The central bank opted against a rate cut earlier this week, citing persistent inflation risks. Powell explained, “Because the economy is still solid, we can take the time to actually see what’s going to happen.”
Trump responded online: “Don’t say that you think there will be Inflation sometime in the future, because there isn’t now but, if there is, raise the Rates!”
According to a Reuters report, Trump also urged the Federal Open Market Committee (FOMC) to “override” Powell, though such a move would be highly unusual. Fed decisions typically follow consensus, and the rate hold this week was unanimous.
Next moves and Powell’s future
With Powell’s term ending in May 2026, Trump is expected to announce a nominee for his replacement in the coming months. One name floated is Fed governor Chris Waller, who has suggested rate cuts could begin as early as July but supported this week’s decision to maintain current levels.
The Federal Reserve has not commented on the matter.
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