US President Donald Trump on Friday, August 1, urged the Federal Reserve’s board of governors to take control over interest rate decisions from Chair Jerome Powell, intensifying his criticism of the central bank chief for holding rates steady.
In a post on his Truth Social platform, Trump called Powell “stubborn” and accused him of failing to act despite low inflation and the need for rate cuts.
“If Powell doesn’t ‘substantially’ lower rates,” Trump wrote, “THE BOARD SHOULD ASSUME CONTROL, AND DO WHAT EVERYONE KNOWS HAS TO BE DONE!”
The Fed has kept its benchmark rate steady at an average of 4.33% this year, citing the need to evaluate the inflationary impact of Trump’s previously imposed tariffs. The central bank’s preferred inflation gauge is currently running at an annual pace of 2.6%, slightly above its 2% target.
Trump, who has frequently attacked Powell during his presidency and beyond, has called for a sharp three percentage point cut in interest rates. He argues that lower rates would support economic growth and reduce borrowing costs for both the federal government and consumers. However, economists warn such aggressive easing could risk overheating the economy and stoking inflation.
The US Supreme Court had ruled in May that firing the Fed chair over disagreements would not be permissible — so Trump’s hands are tied on that. However, the White House has since explored the option of removing Powell for reasons like cost overruns in the central bank’s $2.5 billion renovation projects.
Powell’s term as Fed chair runs through May 2026, after which a sitting president can nominate a replacement subject to Senate confirmation.
Also Read: US Federal Reserve leaves interest rates unchanged despite Trump’s push for reduction
