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Trump vs. Federal Reserve policy is heating up again as Donald Trump publicly blasts Jerome Powell’s recent decisions.
In a fiery Truth Social post, Trump attacked Powell for refusing to cut interest rates. He mocked Powell’s speech at the Economic Club of Chicago and accused him of being too slow to act.
Trump claimed inflation is “under control” and suggested Powell should follow the European Central Bank’s path. The ECB is expected to lower rates for the seventh time, and Trump asked why the Fed hasn’t done the same. “Too Late Jerome Powell,” he said, “cannot be fired fast enough.”
Trump’s latest remarks bring renewed tension to the conversation around Fed independence. Powell, in his speech, emphasized that the central bank operates independently of political interference. He insisted the Fed would not bend to public or political pressure. “People can say whatever they want,” Powell said, “we’ll stick to our mission.”
Powell holds the line, Trump turns up the heat
Trump vs. Federal Reserve policy now touches on deeper institutional issues. Trump’s threat to remove Powell raises questions about the legality of such a move. According to current laws, the Fed chair cannot be removed without cause. Powell himself reminded his audience that this independence is protected by statute and supported by Congress.
Despite this, Trump keeps urging lower rates. His argument is based on easing inflation and using tariffsClick here for more Details to fund national growth. In several recent posts, Trump claimed the U.S. economy is strong due to tariffs and deregulation. He believes rate cuts would fuel manufacturing and energy production.
These claims, however, conflict with Powell’s cautious stance. The Fed continues to keep rates at 4.25%-4.5%, even as inflation sits at 2.9%. Powell and other central bankers are waiting for more consistent signs before acting. They aim to avoid fueling inflation again with premature cuts.
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Trump vs. Federal Reserve policy shows 2025 stakes
The issue is more than just economic—it’s political. Trump’s pressure campaign could reshape the Fed if he wins reelection. With Powell’s term ending in May 2026, talk of replacing him is already underway. Treasury Secretary Scott Bessent announced that interviews for Powell’s successor will begin this fall.
Bessent, however, also voiced support for FedClick here for more Details independence. He said no emergency action is needed now and praised Powell’s handling of the situation. Still, the contrast between Trump’s demands and Powell’s calm stance could dominate financial headlines going into 2025.
If Trump returns to the White House, his influence over Fed policy may grow. Whether that leads to a full shake-up or a continued standoff remains to be seen. But one thing is clear—Trump vs. Federal Reserve policy is becoming a defining clash of this economic era.
