Donald Trump upbraids Fed chief, suggests ‘Powell’s termination cannot come fast enough!’

President Donald Trump on Thursday ratcheted up his criticism against Federal Reserve Chair Jerome Powell, calling for his “termination” for not cutting interest rates quickly enough. US President Trump argued that the US central bank should have lowered interest rates already this year, and in any case should do so now.

Donald Trump lambasted Jerome Powell for what he perceives as a tardy and misguided approach to monetary policy, particularly his reluctance to reduce interest rates sooner.

“Powell should have lowered rates, like the European Central Bank, long ago, but he certainly needs to do so now,” Trump asserted, dismissing Powell’s recent report as “another, and typical, complete mess.”

The Federal Reserve’s key interest rate has remained steady at 4.25%-4.50% since December, following a series of cuts late last year.

It remains unclear whether Trump is calling for Jerome Powell’s early dismissal or simply criticising the scheduled end of his term. Powell was first appointed as Fed chair by Trump in 2018 and was later reappointed by President Joe Biden in 2021. His current term ends in May 2026.

The White House has yet to comment on the matter.

Jerome Powell’s Cautious Stance

Trump’s significant policy changes, including on tariffs, are unlike anything seen in modern history, putting the Federal Reserve in uncharted waters, Chair Jerome Powell said Wednesday.

“These are very fundamental policy changes,” Powell said at an event hosted by the Economic Club of Chicago. “There isn’t a modern experience of how to think about this.”

Jerome Powell said “the level of the tariff increases announced so far is significantly larger than anticipated” and that the lingering uncertainty around tariffs could inflict lasting economic damage.

With Trump’s tariffs putting the economy on a path toward weaker growth, higher unemployment and faster inflation — all at the same time — the Fed is also facing a situation it hasn’t dealt with in about half a century.

“We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension,” Powell said.

US stocks tumbled as Powell spoke: The Dow was down 700 points, or 1.7%. The broader S&P 500 fell 2.5%. The tech-heavy Nasdaq Composite slid 3.5%.

Donald Trump Highlights ECB Rate Cuts

In his post, Donald Trump contrasted the Fed’s stance with that of the European Central Bank (ECB), which is anticipated to cut interest rates for the seventh time.

Trump claimed that oil and grocery prices are falling and that the US is “getting rich” on tariffs, despite data showing food prices have actually risen over the past year.

Donald Trump - Jerome Powell Beef

Donald Trump’s contentious relationship with Federal Reserve Chair Jerome Powell dates back to Powell’s appointment, with Trump frequently criticising the Fed’s interest rate hikes and even labelling Powell “the enemy” in 2019.

Trump has repeatedly threatened to remove Powell, arguing the president should have more influence over monetary policy, but Powell has consistently asserted that he cannot be dismissed except “for cause” under the law, and has made clear he would not resign if asked.

Trump has also said he won’t reappoint Powell for a third term and that he would let him finish his term, “especially if I thought he was doing the right thing,” according to a Bloomberg interview that published in July.

The legal protections surrounding the Fed chair’s tenure are now under renewed scrutiny, especially after Donald Trump’s removal of officials from other independent agencies and his administration’s calls to overturn the 1935 Supreme Court precedent that limits presidential power to fire agency heads.

With the Supreme Court set to revisit this issue, the outcome could have far-reaching implications for the Fed’s autonomy.

Meanwhile, Powell and Fed officials maintain that their independence is vital for making decisions in the broader economic interest, insulated from short-term political pressures—a stance that could be tested as Trump and his advisers continue to push for greater White House influence over the central bank’s future direction.

(With agency inputs)