Washington: U.S. President Donald Trump recently expressed his displeasure with Jerome Powell, Chairman of the Federal Reserve, over how he handles interest rates. Through an article posted to Truth Social, Trump voiced his disapproval with Powell’s involvement in politics as well as urging him to reduce rates as soon as possible. Trump stressed it was now time for Powell to act since, in his opinion, Powell has been slow in taking actions previously.
Tension between them began when Powell commented on Trump’s decision to impose tariffs, warning of potential negative repercussions for both inflation and economic growth. Furthermore, Powell indicated he wasn’t currently in favour of lowering interest rates, which led to Trump being disgruntled.
Trump wrote on his post, “Jerome Powell needs to act immediately to lower interest rates and change his image as energy prices are down, interest rates are low, inflation is in check and job creation has increased significantly in only two months – this represents a major victory for America! Now is the time for him to stop delaying and cut interest rates instead of playing politics!”
Powell had previously cautioned about how Donald Trump’s tariffs may increase inflation and reduce economic growth, yet he maintained his stance by saying his job is to ensure temporary price increases do not lead to sustained inflation. Furthermore, he indicated his intent not to lower interest rates any time soon by setting them at 4.3% as his target level.
Trump’s and Powell’s longstanding disagreement is well known. Trump often criticises Powell’s policies regarding interest rates and monetary policy; during his 2024 presidential campaign he even targeted him despite having appointed him as Chairman in 2018. As time passed, their relationship deteriorated further, with Trump even hinting at potentially ousting Powell from his post (albeit legally impossible given the independence of the Fed).
Powell has defended the independence of the Federal Reserve by emphasising its decisions are solely driven by economic data and conditions rather than political pressure. Powell will remain Chairman until May 2026 and has made it clear he wants to avoid political influences in making policy decisions.