Trump Accuses Fed of Political Bias in Rate Decisions

Donald Trump has accused Federal Reserve Chair Jerome Powell of political bias, alleging that the central bank manipulated economic data and interest rate decisions to influence the outcome of his presidency. Trump’s claims center around the manipulation of Non-Farm Payroll numbers, which he argues were inflated during election periods to favor Democrats and hinder his administration’s economic policies. He also suggested that had the actual employment data been lower, the Fed might have opted for rate cuts during the July meeting [1].

Trump has repeatedly criticized Powell for maintaining interest rates despite his administration’s policies, including the imposition of tariffs, which he claims had minimal inflationary effects between 2018 and 2019. Trump argues that this period supports the case for rate cuts, noting that yearly goods inflation only rose slightly during this time [1]. Powell, however, has defended the Fed’s decision to hold rates by emphasizing the long-term inflationary risks associated with tariffs, estimating a potential $2.1 trillion impact on the economy over the next decade [1].

Trump’s criticisms have extended beyond the Fed. He has accused major banks, including JPMorgan Chase and Bank of America, of discriminating against him and his supporters, calling for executive action in response [7]. These claims align with broader Republican criticisms of corporate bias, often referred to as “woke capitalism,” and reflect a consistent pattern of rhetoric from Trump on economic and financial institutions [2].

In an effort to reshape the Fed’s leadership, Trump has proposed a temporary replacement for Powell, with Federal Reserve Governor Christopher Waller emerging as a top contender within his team [3]. Other potential candidates include Kevin Warsh and Scott Bessent, though the latter was recently ruled out in favor of an unexpected media personality [6][8]. Trump has reportedly considered up to four individuals for the position, signaling a strong desire to align the Fed with his economic agenda [6].

While the Fed remains independent, Trump’s campaign against Powell and the central bank highlights a growing politicization of monetary policy. The has called for rate cuts, with some Fed officials reportedly in favor of reductions, potentially setting the stage for a cut in the September meeting [1]. However, the extent to which political considerations influence the Fed’s decisions remains a key topic of debate.

Trump’s campaign has also included humorous and unpredictable statements, such as suggesting a media personality for the Fed chair role, underscoring the volatility of his appointments process [8]. These developments, combined with the broader political tensions, suggest that the relationship between the executive branch and the Fed is becoming increasingly contentious.

Sources:

[1] Trump Accuses Fed Chair of Political Bias and Calls for Rate Cuts (https://en.coin-turk.com/trump-accuses-fed-chair-of-political-bias-and-calls-for-rate-cuts/)

[2] US lenders weighed reputation rules, not politics, in closing accounts: sources (https://www.reuters.com/sustainability/boards-policy-regulation/us-lenders-weighed-reputation-rules-not-politics-closing-accounts-sources-say-2025-08-07/)

[3] Waller emerges as favorite for Fed chair among Trump team (https://ca.news.yahoo.com/waller-emerges-favorite-fed-chair-142912130.html)

[7] Trump says JPMorgan and Bank of America discriminated against him (https://www.ainvest.com/news/trump-jpmorgan-bank-america-discriminated-prompting-executive-order-2508/)

[6] Trump advisers push for temporary Fed governor (https://financialpost.com/news/trump-advisers-push-temporary-fed-governor)

[8] Trump rules out Scott Bessent as Fed chair (https://www.msn.com/en-us/money/markets/trump-rules-out-scott-bessent-as-fed-chair/ar-AA1JWPwp)