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Highlights
- Trump criticizes Powell’s refusal to cut interest rates, claiming it’s damaging to the economy and increasing debt costs.
- Powell's cautious approach to rate cuts contrasts with Trump's push for aggressive cuts to spur economic growth and reduce debt.
- Trump considers replacing Powell with a Fed chair more aligned with his policies on lowering interest rates for economic boost.
President Donald Trump recently renewed his call for Jerome Powell, the Chairman of the Federal Reserve, to resign. This comes as the president has consistently criticized Powell for his approach to managing interest rates.
Trump, who once nominated Jerome Powell for the role, has now described the Fed Chair as a “stubborn mule” and suggested that he is making economic decisions that are not in the country’s best interest.
Donald Trump Growing Frustration with Jerome Powell
In a public statement, Trump stated that he would “love” for Jerome Powell to resign. The president argued that Powell’s refusal to lower interest rates quickly was harmful to the economy. Trump said,
“I think we should be paying 1% right now, and we’re paying more because we have a guy who suffers from, I think, Trump Derangement Syndrome.”
He further criticized Powell for his stance, labeling him “stupid” and saying that his policies were causing the country to pay more on its debt obligations.
The president’s dissatisfaction with the Fed chair has been ongoing. In the past, Trump has repeatedly expressed his preference for lower interest rates, believing that such a move would benefit economic growth. This time, however, Trump’s concerns have intensified as he pushes for more government spending, particularly with the proposed tax-cut package. Lower interest rates would make it cheaper for the government to finance its debt.
Federal Reserve’s Stance on Interest Rates
The Federal Reserve has adopted a more cautious approach to interest rate cuts. Jerome Powell, along with other Fed officials, has emphasized the need to be patient given the uncertainty surrounding the economic outlook.
Jerome Powell stated that while inflation remains a concern, the labor market is still strong, making it important for the Fed to avoid making hasty decisions.
Although the Fed did lower interest rates several times in the past year, the most recent rate cut was in December. Since then, the central bank has refrained from further reductions, believing that a wait-and-see approach is necessary to gauge future economic conditions. Powell and other officials have argued that premature cuts could lead to higher inflation, which could undermine the economy in the long run.
Trump’s Search for a New Fed Chair
With Jerome Powell’s term as Fed chair expiring in May 2026, Donald Trump has signaled that he is considering potential replacements. The president has hinted that he is looking for someone who would be more in line with his economic policies, particularly in relation to interest rates.
Donald Trump recently mentioned that he was selecting among a few candidates to replace Powell. He has not yet revealed who these potential candidates are, but some names, including Kevin Warsh, a former Fed governor, have been discussed. Trump has made it clear that he would prefer someone who is more willing to lower interest rates to stimulate growth.
Concurrently, Donald Trump’s criticism of Powell has found support from various figures, including businessman and entrepreneur Grant Cardone. In a recent tweet, Cardone echoed Trump’s sentiment, calling for Powell to resign immediately.Cardone tweeted,
“Fed Chairman Jerome Powell should RESIGN today! There is no inflation and he continues to punish the American middle class with high mortgage rates.”
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