United States President, Donald Trump has lashed out at Federal Reserve Chair, Jerome Powell, calling for his “termination” for not cutting interest rates quickly enough.
Trump criticized the Fed leader in a social media post, saying that the US central bank is lagging behind its European counterpart.
The European Central Bank (ECB) announced today that it is cutting interest rates for the seventh time in the past year.
“Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete ‘mess!’ Powell’s termination cannot come fast enough!”
Donald Trump
Trump used the news from the European Central Bank to pressure the US’s Federal Reserve Chair Jerome Powell to likewise lower interest rates. “Should have lowered Interest Rates, like the ECB, long ago, but he should certainly lower them now,” he wrote on Truth Social.
The European Central Bank cut interest rates to 2.25 percent, owing in part to the turbulence Trump’s trade tariffs have caused in the international market.
The bank, which sets interest rates for countries that use the euro currency, also noted that inflation had started to slow among its members.
It emphasised it was hoping to keep the “disinflation process” on track, despite the economic uncertainty and a weakening global market.
A Response To Fed’s Warning
Trump’s comments come one day after the Federal Reserve Chair delivered a stark warning about the effect of Trump’s sweeping tariffs on the economy.
Powell on Wednesday said at an economic event in Chicago that the Trump administration has brought “very fundamental policy changes,” including sweeping tariffs that are “significantly larger than anticipated.”
He said that such changes are unlike anything seen in modern history, putting the Fed in uncharted waters and on a path to confront a challenge it hasn’t seen in decades.
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.
Trump has on several occasions threatened to remove Powell from his post, and criticism of his Fed Head stretches back to 2018, when Powell took the reins of the world’s most powerful central bank.
The Fed raised interest rates a handful of times that year over worries that a historically tight job market could spur higher inflation. In 2019, Trump even called Powell “the enemy.”
In March 2020, Trump told reporters he had the “right to remove (Powell) as Chairman” and that “he has, so far, made a lot of bad decisions, in my opinion,” after markets tanked amid the pandemic.
However, he also praised Powell for cutting rates to zero to prevent an economic collapse.
Most recently, Trump has 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.
For his part, Powell has pointedly noted that removing a Fed chair is “not permitted under the law,” and has said he intends to serve out the remainder of his term.
However, that legal protection, which comes as a result of the Fed’s status as an independent government institution, may be an open question.
Trump has fired two Democratic members of the Federal Trade Commission, also a long-independent agency, arguing that their “continued service on the FTC is inconsistent with my administration’s priorities,” according to a Wall Street Journal report of a letter Trump sent to them.
On Wednesday, Trump fired two Democrats on the three-member board of the National Credit Union Administration, a federal insurer and regulator of credit unions.
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