Trump Demands Powell's Removal Over Rate Cut Disagreement

US President Donald Trump has escalated his criticism of Federal Reserve Chair Jerome Powell, accusing him of being too slow to cut interest rates. Trump's remarks came after Powell stated that the Federal Reserve would wait for more clarity before considering any rate adjustments, citing the potential impacts of Trump's tariffs on inflation and economic growth.

Trump, who has been advocating for lower interest rates, expressed his dissatisfaction with Powell's approach. In a post on Truth Social and during an Oval Office press conference, Trump stated that Powell's "termination cannot come fast enough." He also suggested that if he wanted Powell out, it would happen swiftly. This escalation in rhetoric follows months of private discussions within the Trump administration about the possibility of removing Powell from his position before his term ends in 2026.

Trump's comments come at a time when the U.S. economy faces uncertainties due to Trump's recent imposition of steep tariffs, which have roiled markets and raised concerns about economic stability. Trump has been pushing for rate cuts as a means to prevent a potential downturn, comparing Powell's inaction to the European Central Bank's recent monetary policy easing.

Powell, however, has maintained his stance on the independence of the Federal Reserve, stating that it is a matter of law and that he will not act in response to political pressure. He has also indicated that he intends to serve out the entirety of his term.

Florida Senator Rick Scott agreed with the president, saying, “it’s time for new leadership at the Federal Reserve.” Trump’s public criticism of the Fed breaks a decades-long convention in American politics that sought to safeguard the central bank from political scrutiny, which includes any executive decision to replace the chair.

In an address at the Economic Club of Chicago, Powell said Fed independence is “a matter of law.” Powell previously signaled his intent to serve out the remainder of his tenure, which expires in May 2026.

Trump's criticism of Powell is not new; he has been pressuring the Fed chair to cut interest rates for months. Powell has consistently resisted these pressures, citing the need for a patient approach as the effects of tariffs become clearer. The ongoing tension between the president and the Fed chair highlights the political pressures facing the central bank and its efforts to maintain independence in monetary policy decisions.