Trump Attacks Fed Chair Jerome Powell, Calls for His Termination

US President Donald Trump intensified his criticism of Federal Reserve Chairman Jerome Powell on Thursday, suggesting that Powell should be removed from his position. The attack comes in the wake of Powell’s recent comments about the impact of tariffs on the U.S. economy.

Trump made the remarks on Truth Social, posting: "Powell's termination cannot come fast enough!" His outburst is seen as part of his ongoing frustration with Powell’s handling of U.S. monetary policy. 

Powell’s Warning on Tariffs and Inflation

Powell has warned that the tariffs, which are a cornerstone of Trump’s economic agenda, could lead to a rise in inflation and a slowdown in economic growth. During a speech this week, Powell explained, "Tariffs are highly likely to generate at least a temporary rise in inflation," adding that the effects could persist, slowing growth while pushing inflation higher.

Trump has strongly disagreed with Powell’s assessment, repeatedly calling out the Federal Reserve for what he perceives as delays in adjusting interest rates to better support the U.S. economy. In his latest post, Trump mocked Powell for his response to the situation, writing on Truth Social -

"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!" 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". 

The Limits of Presidential Power

Trump’s comments also bring into focus the question of the President’s authority over the Federal Reserve, which is designed to operate independently from political influence. Powell, appointed by Trump in 2017 and re-nominated by President Biden in 2022, is protected from being fired at will under the legal precedent set by the Supreme Court’s Humphrey's Executor v. United States case. However, the court is set to hear a case that could alter these protections.

While Trump has suggested that Powell’s removal is necessary, Powell has consistently defended the Fed’s independence. "Fed independence is very widely understood and supported in Washington — in Congress, where it really matters," Powell said in response to the ongoing political pressure.

What’s at Stake for the U.S. Economy?

Despite Powell’s reassurances about the Fed’s role, Trump’s rhetoric raises concerns over the stability of U.S. economic policymaking. The independence of the Federal Reserve has long been seen as a critical component of maintaining investor confidence and ensuring sound economic decision-making in the U.S. The uncertainty surrounding White House policies and their impact on inflation has led to volatility in financial markets, with some experts suggesting that Trump’s criticism of Powell could further unsettle the economic landscape.

Looking Ahead

As tensions between the White House and the Federal Reserve escalate, all eyes will be on the Supreme Court’s upcoming decision, which could have significant implications for the Fed’s independence. In the meantime, President Trump’s calls for Powell’s removal appear to be just the latest chapter in a long-standing conflict over U.S. economic policy and trade.

Powell’s current term as Fed chair is set to run until May 2026, and despite Trump’s vocal disapproval, Powell has shown no signs of stepping down.