Trump Accuses Powell of Stubbornness Demands 1 Percent Rate Cuts

U.S. President Donald Trump has intensified his public pressure on the Federal Reserve to cut interest rates, accusing Fed Chair Jerome Powell of being a “stuborn MORON” and urging the board to act if the chair refuses to comply. In a recent post on his Truth Social platform, Trump called for immediate rate cuts, even suggesting reductions to as low as 1 percent, arguing that high borrowing costs are harming everyday Americans [2]. He further warned that if Powell does not act, the Fed board should step in and “do what everyone knows has to be done” [2].

This marks the latest escalation in a long-standing disagreement between Trump and the Fed. During his time in office, Trump frequently criticized Powell for raising rates too quickly, a move he believed hindered economic growth. With the 2024 election approaching, Trump’s current stance appears to blend economic concerns with a broader political strategy aimed at influencing public perception of inflation and employment [4].

The Fed, however, has consistently emphasized the need for independence from political influence. Powell has maintained that while inflation has eased since its peak, it is still premature to lower rates. The central bank has stressed the importance of preserving market confidence and preventing inflationary pressures from returning [3]. Economists have echoed this sentiment, warning that political interference could undermine the Fed’s credibility and its ability to manage the economy effectively. Diane Swonk, an economist, highlighted that such pressure could distort the Fed’s balance between controlling inflation and supporting employment [2].

To date, the Fed has resisted Trump’s demands. At recent meetings, it kept interest rates unchanged, citing the need for caution and stability in the economic recovery [6]. Markets have not yet responded with significant shifts, but continued public pressure from Trump could influence investor expectations and potentially lead to increased volatility.

Trump’s rhetoric has also reignited broader debates about the role of the central bank within a democratic framework. While it is not unusual for presidents to comment on monetary policy, the directness and intensity of Trump’s demands stand out. Analysts argue that the Fed’s independence is a key factor in its effectiveness, and interference could lead to unintended economic consequences [7].

As the 2024 election cycle gains momentum, the tension over interest rates is expected to grow more intense. Trump’s continued calls for rate cuts underscore the deepening divide between political leaders and the Fed’s policy-making process. Whether the Fed will ultimately yield to political pressure or maintain its course remains uncertain, but the outcome could have far-reaching implications for the U.S. economy and the global financial system.

Source:

[1] https://www.nytimes.com/2025/07/31/business/trump-fed-interest-rate-cuts.html

[2] https://coinfomania.com/trump-fed-rate-cuts/

[3] https://www.reuters.com/business/path-fed-rate-cuts-trump-wants-may-involve-higher-2025-07-31/

[4] https://www.rawstory.com/interest-rates-2673798159/

[6] https://www.13abc.com/2025/07/30/federal-reserve-leaves-interest-rates-unchanged-even-trump-demands-cuts/

[7] https://laist.com/news/politics/trump-keeps-pressuring-fed-to-cut-rates-heres-why-its-independence-matters