The conflict between former President Donald Trump and Federal Reserve Chair Jerome Powell has resurfaced, with Trump publicly calling for Powell's resignation.
Political Tensions Surrounding the Fed
Former President Trump has reignited tensions with the Federal Reserve, calling for the immediate resignation of Chair Jerome Powell. His statement followed criticism of the Fed's headquarters renovation and accusations of deceptive testimony by Powell. In a post on Truth Social, Trump labeled Powell as 'Too Late,' implying that the Fed has been slow to respond to economic challenges.
Interest Rates at the Center of Dispute
Trump's frustration centers on the Fed's decision to maintain high interest rates, currently between 4.25% and 4.5%. He advocates for deep cuts, potentially down to 1%, claiming that current rates are hurting the U.S. economy. This position is not new for Trump, who has consistently urged the Fed for looser monetary policy.
Powell's Response and Economic Implications
Jerome Powell defended the Fed's actions by pointing to inflation driven by tariffs from Trump's presidency as a key reason for the cautious approach. Speaking at a European Central Bank forum, he noted that the Fed paused rate cuts to assess inflation impacts. Powell emphasized that the central bank remains focused on economic data, not political pressure.
While Trump cannot directly remove Powell, reports suggest he is considering potential replacements if re-elected, raising concerns about the Fed's independence and market stability.
