“If I want him out, he will leave there soon, believe me,” Trump said in the Oval Office while asking questions in the Oval Office during a visit with Italian Prime Minister Giorgia Meloni. “I’m not happy with him.”
Trump’s comments were an article published on his social media website where the Republican president called on Powell to lower the Fed’s short-term interest rate and said: “Powell’s termination cannot be swift!” The term of the Fed chairman will end in May 2026.
Powell was originally nominated by Trump in 2017 and was appointed for four years by Democratic President Joe Biden in 2022. He added: “We are not mobile except for the reasons. We serve very long, seemingly endless terms.”
Trump’s criticism stems from his views, as he said on Thursday: “We have no inflation at all.” The Fed drastically raised interest rates in 2022 and 2023 to slow down borrowing, spending and tame inflation, thus steadily falling from 9.1% in 2022 to 2.4% last month. Inflation is far from the Fed’s 2% target. The Fed even tripled at the end of last year.
But since then, Powell and most other Fed policymakers have stressed the uncertainty arising from Trump’s comprehensive tariffs, including taxes on all import taxes, and a 145% tax on imports from China. In a speech in Chicago on Wednesday, Powell reiterated that the Fed is waiting for a clearer attitude before taking any action and said tariffs could worsen inflation. Powell firmly insists that the position emphasized by the chairs that the Fed has emphasized since at least the 1970s is independent. At that time, the Fed was widely believed to have lowered the Fed’s inflation rate by 15 years due to President Richard Nixon’s request for lowering interest rates in the 1972 election.
Economic research shows that an independent central bank is more likely to keep inflation because it is more willing to do unpopular things, such as raising interest rates to hit rising prices. Wall Street investors also largely prefer the independent Fed, although stocks seem to have no response to Trump’s comments.
Powell said Wednesday that the Fed will be based solely on the best decision for all Americans.
“That’s the only thing we have to do,” Powell said. “We’re never affected by any political pressure.”
He also suggested that after the tariffs, central banks will focus on resisting inflation, which could mean they will increase interest rates.
Trump complains that interest rates are still rising: “Because we have a Fed chairman who is playing a political role.” Long-term interest rates have risen after Trump announced a trade fine.
Trump and members of his economic team said they hope that long-term interest rates will make Americans less expensive to buy homes, cars and appliances. However, the Fed controls short-term interest rates, which can only indirectly affect long-term borrowing costs.
Cases before the Supreme Court could make it easier for the president to fire the federal president of independent institutions, such as the Federal Reserve. The dispute is the two Trump fired, and the judges get them up as they consider the case.
Powell said he is watching the case closely, but may not apply to the Fed given the court’s past exemptions to the central bank. Lawyers in the Trump administration have tried to narrow the focus of the case and believe it does not involve the Fed.
Trump said in a 2024 campaign interview with Bloomberg News that he would allow Powell to serve as chairman. “There is certainly no political coercion to the Fed,” Kevin Hassett, Trump’s top economic adviser, said in a TV interview earlier this month.
Powell began Trump’s second term in a relatively safe location with low unemployment and low inflation, increasingly closer to the Fed’s 2% target, which could save him from the president’s criticism.
But Trump’s tariffs increase the threat of recession, while inflationary pressures are higher and slower growth is a tough place for Powell, whose mission is to stabilize prices and maximize employment. Due to Trump’s actions and economic changes, the president appears to be looking to blame Powell.
On April 2, Trump proposed an increased tariff rate hike based on the U.S. trade deficit with other countries, which drew strong opposition from financial markets, which almost immediately led to him announcing a 90-day pause.
Wall Street banks such as Goldman Sachs have already proposed the chances of a recession likely to begin. Consumers’ surveys on their job prospects have become increasingly pessimistic and fear that inflation will have an impact as the cost of import taxes is transferred to them.
Yale University’s budget lab estimates that the increase in inflationary pressure on tariffs will equal the average household loss of $4,900 in the United States.
