Trump Wants The Congress To 'School' The 'Hardheaded' Powell During The Fed Chair's Testimony Today

Federal Reserve Chair Powell is set to appear before Congress to deliver his semi-annual monetary policy report testimony to the House Financial Services Committee. However, just hours before this critical hearing, U.S. President Trump once again lashed out at Powell on social media, arguing that the Fed should cut interest rates by at least 2 to 3 percentage points and calling on Congress to "work this very hardheaded person". 

Trump wrote in his post: "' To Late' Jerome Powell, of the Fed, will be in Congress today in order to explain, among other things, why he is refusing to lower the Rate. Europe has had 10 cuts, we have ZERO. We should be at least two to three points lower."

He went on to say that the U.S. currently has "no inflation, a strong economy," and lowering interest rates "would save the U.S. $800 billion a year."

"I hope Congress really works this very dumb, hardheaded person, over. We will be paying for his incompetence for many years to come," Trump added in his post. 

Powell is scheduled to testify before Congress on Tuesday and Wednesday this week (Eastern Time). In the week leading up to this, Trump has repeatedly made sharp remarks demanding that the Fed cut rates.

Powell's term will end next May. After Powell steps down, the future direction of the Fed's monetary policy remains highly uncertain.

Last week, the Fed kept interest rates unchanged in the range of 4.25%-4.50%. However, the June dot plot showed that while most officials (8) expect two rate cuts by the end of 2025, as many as seven members still support "no rate cuts" this year, nearly matching the number of officials favoring two cuts, reflecting divisions within the committee.

Additionally, although during last week's post-rate decision press conference, Powell firmly hinted at his stance of holding steady and stated that due to the Trump administration's plans to impose new import tariffs, U.S. consumers would pay more for goods, he expects "significant" inflation in the future.

Yet this week, two Fed governors-Waller and Bowman-publicly "turned dovish," fueling market speculation about a shift in Fed policy. Waller and Bowman indicated that a July rate cut is not off the table, triggering a rise in U.S. stocks on Tuesday.

Against the backdrop of colleagues "turning dovish" and presidential pressure, how Powell will perform before Congress tonight has drawn even more attention from investors.