President Donald Trump renewed his attacks on Federal Reserve Chairman Jerome Powell during a Sunday interview, accusing him of artificially inflating interest rates. Trump argued that rates should be much lower—between 1% and 2%—in contrast to the current 4.25% to 4.5% range.
He claimed the U.S. economy was performing so well that Powell’s actions didn’t matter, although he still labeled Powell as a “bad” and “stupid” person. Trump’s remarks continued a long-running public feud between the president and the central bank’s leader.
Trump Shifts From Threats to Public Pressure, Seeks Greater Control Over Fed Policy
Previously, Trump’s threats to fire Powell had unnerved global bond markets and pushed rates upward. However, his strategy has since shifted toward repeated public criticisms and demands for policy changes. Trump’s comments appear aimed at pressuring the Federal Reserve into adopting a more accommodative monetary policy. The administration has adopted a more aggressive tone in trying to shape Fed decisions, moving from behind-the-scenes influence to direct media confrontation.
Trump Renews Attacks on Fed Chair Powell, Signals Plans to Replace Him Before Term EndsIn a move highlighting his desire for more control over monetary policy, Trump declared on Friday that he would only appoint a new Fed chair if the candidate committed to cutting interest rates. This statement is the most direct indication yet that the White House intends to steer monetary policy more assertively in the coming year. Trump’s insistence on appointing a compliant chair suggests a potential shift in the traditionally independent nature of the Federal Reserve.
White House Eyes Early Powell Replacement, Risks Confusion with Possible “Shadow” Fed Chair
Treasury Secretary Scott Bessent added fuel to the speculation by telling CNBC that the administration could announce a replacement for Powell as early as October, even though his term runs until next May. This raises concerns about a possible “shadow” Fed chair—an unofficial or replacement figure giving conflicting policy directions alongside Powell. Such a situation could lead to market confusion and increased volatility as investors attempt to decipher competing signals.
Trump said he had three potential candidates in mind to replace Powell but did not name them. When asked specifically about former Fed governor Kevin Warsh, Trump acknowledged his talent but did not commit to choosing him, suggesting a broader list of options. The administration’s ongoing criticism of Powell and the consideration of early replacement candidates reflect a broader effort to bring the Fed in line with the president’s economic vision.
