Hours before the Federal Reserve was set to announce its latest decision on interest rates, former President Donald Trump unleashed a scathing attack on Fed Chair Jerome Powell. In a statement made outside the White House, Trump called Powell “stupid” and suggested that the central bank chief was politically motivated.
Trump criticized the Federal Reserve’s reluctance to lower rates, asserting that the current borrowing rate should be at least two percentage points lower. Comparing the U.S. to Europe, he pointed out that European central banks have made several rate cuts, while the U.S. has not followed suit.
Fed Maintains Cautious Stance Amid Uncertainty, Ignores Trump’s Push for Rate Cuts
Despite Trump’s aggressive rhetoric, market indicators showed no expectation of a rate cut at the current Federal Open Market Committee (FOMC) meeting. Analysts predict that any potential move by the Fed will not happen until September.
The current federal funds rate remains within a target range of 4.25% to 4.50%. Federal Reserve officials, including Powell, have communicated caution in altering interest rates amid ongoing economic uncertainties, emphasizing the need for more data before making a policy shift.
Trump Blasts Fed Chair Powell Ahead of Rate Decision, Pressures Central Bank to Cut Interest RatesOne of the factors complicating the Fed’s decision-making is the uncertain impact of Trump’s own tariffs. While inflation measures have remained relatively stable since the tariffs were introduced, analysts suggest that a combination of economic variables may be muting their effect. Trump, however, maintains that the Federal Reserve’s high rates are unnecessarily costly to the U.S. economy, claiming that the country is spending “hundreds of billions” more in financing costs than it would if rates were cut.
Trump Intensifies Personal Attacks on Powell, Fueling Debate Over Fed’s Independence
Trump did not hold back in his personal attacks, questioning Powell’s intelligence and motives. While acknowledging Powell’s concerns about inflation, Trump dismissed them as unfounded and reiterated his belief that there is no significant inflation threat. He suggested that Powell’s resistance to rate cuts stems from personal animosity, stating, “I think he hates me, but that’s OK.” This was just the latest in a long history of Trump’s public criticisms of Powell, dating back to his presidency.
Trump’s criticism comes at a time when the Fed is striving to maintain its independence amid growing political pressure. Despite a recent meeting between Trump and Powell at the White House, the content of their conversation remains undisclosed. Fed officials, including Powell, have repeatedly affirmed their commitment to making decisions based on data, not politics.
Nonetheless, Trump hinted at a more direct approach, even joking about appointing himself as Fed chair. With Powell’s term ending in May 2026, Trump has indicated that he plans to name a successor, signaling ongoing political tension over the central bank’s direction.
