On Thursday, President Trump took aim at Federal Reserve Chair Jerome Powell, writing on social media that Powell should be cutting interest rates and that his “termination cannot come fast enough.”
Mr. Trump’s comments on his social media app, Truth Social, came after Powell delivered a speech on Wednesday warning of the potential consequences of the Trump administration’s trade war, while reiterating that the central bank intends to keep interest rates unchanged for the time being.
The Fed has paused interest rate cuts this year due to persistent inflation, which has remained above its target growth rate of 2% per year.
Meanwhile, Mr. Trump has imposed a series of tariffs on major trading partners, which economists warn could reignite inflation.
Powell emphasized those risks on Wednesday, stating that the Trump administration’s tariffs could create a “challenging scenario” for the United States that requires managing both accelerating inflation and a slowing economy.
These conditions are characterized as “stagflation,” a mashup of “stagnation” and “inflation” that refers to periods when economic growth slows while price increases accelerate.
Mr. Trump’s social media post on Thursday referred to the European Central Bank, which cut interest rates by 0.25 percentage points after the president posted his message.
“The ECB is expected to cut interest rates for the 7th time, and yet, ‘Too Late’ Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete ‘mess!'” Mr. Trump wrote.
He went on to say, “Oil prices are down, groceries (including eggs!) are down, and the United States is getting RICH on tariffs.” Too Late should have lowered interest rates, like the ECB, long ago, but he should certainly do so now. Powell’s termination can’t come soon enough!”
Can Mr. Trump fire Powell?
In 1935, the Supreme Court issued a landmark decision that affirmed Congress’ authority to establish independent federal agencies whose board members could only be removed before their terms expired “for cause.”
“The fundamental necessity of maintaining each of the three general departments of government entirely free from the control or coercive influence, direct or indirect, of either of the others has often been stressed, and is hardly open to serious question,” the court ruled in Humphrey’s Executor v. United States.
After Mr. Trump was elected in November, Powell stated that he would not resign if asked by the president, who had previously criticized his performance. Powell has also stated that, under the law, presidents cannot fire or demote the Fed chair.
In a meeting with Italian Prime Minister Giorgia Meloni on Thursday, President Trump said of Powell, “Oh, he’ll leave. “If I ask him to, he’ll leave.”
Mr. Trump nominated Powell to lead the Fed in 2017, and President Joe Biden renominated him in November 2021. Powell’s term as Fed chair ends on May 15, 2026.
Powell has consistently defended the central bank’s independence. In December, he stated that shielding the Fed from political influence is “for the benefit of all Americans,” allowing it to make decisions based on economic data rather than the wishes of elected officials.
It is unclear whether the White House will choose to respect the Fed’s independence. Mr. Trump has long challenged political norms, from refusing to accept the 2020 presidential election results to, since his re-election in January, empowering Elon Musk to reduce the federal workforce through the billionaire’s Department of Government Efficiency.
According to Jaret Seiberg, an analyst at TD Cowen Research Group, President Trump fired two Democrats from the board of another financial regulator, the National Credit Union Administration, this week.
In March, the White House fired two Democratic members of the Federal Trade Commission, which has traditionally operated as an independent, bipartisan body.
“The President appears to be moving closer to justifying the removal of Democrats from the Federal Reserve Board.” By firing the two Democrats from the credit union regulator, the president is setting a precedent that he has complete control over financial regulators, including the Federal Reserve,” Seiberg wrote in a report.