Chairman of the US Federal Reserve Jerome Powell during a House Financial Services Committee hearing in Washington, DC, on June 24. (Photo by Alexander Drago / Bloomberg
President Donald Trump escalated his attacks on Federal Reserve Chair Jerome H. Powell over the weekend, calling him a "stupid person” for not cutting short-term borrowing rates right away.
The comments, made in a Fox News interview with Maria Bartiromo, marked the latest insult as Trump and his advisers ramp up efforts to pressure Powell to resign or lower interest rates.
"He’s a bad person,” Trump said in the interview, which aired Sunday. "We’re going to get somebody into the Fed who’s going to be able to lower the rates.”
Powell, who is in his last year as Fed chairman, has ruled out any plans to step down early and says the central bank will make its policy decisions based on data rather than political pressure. A spokeswoman declined to comment for this story.
Like many presidents before him, Trump has pressed the Fed to lower its short-term benchmark rate, which trickles through the financial industry and influences what millions of people pay for mortgages and other types of loans. Generally speaking, those pressure campaigns have backfired.
Trump, however, has made attacking Powell, whom he originally elevated to the position in 2017, a routine part of his public remarks. He even toyed with removing Powell this spring, before dialing back his rhetoric after senior advisers warned the president that trying to remove the Fed chief risked exacerbating market turmoil over the president’s trade war. Though the Supreme Court signaled last month that Trump lacks the authority to dismiss a Fed chief, that hasn’t stopped the president from airing his policy complaints.
Last week, for instance, he encouraged Republican lawmakers to hassle Powell as he offered regularly scheduled testimony in the House and the Senate. "I hope Congress really works this very dumb, hardheaded person, over,” he said on his social media site. "We will be paying for his incompetence for many years to come.”
For the most part, lawmakers were exceedingly polite to Powell, who stressed that the Fed remains in a "wait-and-see” mode as it continues to gauge the fallout from Trump’s trade war and other policies that have clouded the economic outlook.
Trump’s broadsides come as lawmakers work to complete a massive tax-cut bill that would require the United States to sell a glut of new debt, potentially requiring the government to pay even more interest to attract buyers for its debt.
But Trump says borrowing costs could be lower if the Fed would reduce rates. Though he described the economy as in strong shape, Trump told Bartiromo that interest rates should be 1 percent or 2 percent rather than the current 4.25 percent to 4.5 percent.
White House spokesman Kush Desai said recent inflation reports, which have come in lower than expected, show that "the Bidenflation Crisis is over thanks to the Trump administration’s supply-side reforms.” He added that the administration is now focused on laying the groundwork for stronger economic, job and investment growth, including through the tax-cut bill, and said it’s time for monetary policy to support that agenda and help fuel a U.S. economic resurgence.
The Fed is in a tricky spot, potentially facing pressure on both sides of its mandate for stable prices and a strong labor market. Prolonged trade uncertainty risks slowing growth and unsettling financial markets - conditions that would normally prompt a rate cut. At the same time, tariffs could reignite inflationary pressures, potentially justifying higher rates instead. Some economists warn that price increases could take longer to show up than signs of a weakening economy. Indeed, tariffs have yet to rekindle inflation to any significant degree.
Powell, in his testimony last week, did little to open the door to a rate cut at the Fed’s next meeting in late July. The Fed has kept interest rates steady at four consecutive meetings, including at the most recent one about two weeks ago.
"If it turns out that inflation pressures do remain contained, we will get to a place where we cut rates sooner rather than later, but I wouldn’t want to point to a particular meeting,” Powell told House lawmakers.
Though Fed officials unanimously agreed to keep rates steady at their meeting this month, divisions are starting to show. After its meeting, Trump appointees Christopher Waller and Michelle Bowman both said they could be open to cutting rates as soon as next month, assuming tariffs cause a small, temporary bump in prices that won’t push up inflation beyond the next year.
But for now, the pair appear to be outliers among the 19 officials who participate in Fed policy. Most, including Powell, signal the need to be cautious as they wait for more data to come in.
The president’s broadsides also come as he is said to be considering whether to nominate a replacement for Powell earlier than normal, potentially by late summer, according to people familiar with the deliberations. Trump himself has said he is considering a few candidates and that he expects to make a decision soon.
Those in the mix are said to include Kevin Warsh, a former Fed governor and a finalist for the job in 2017; Kevin Hassett, who heads the White House National Economic Council; and Treasury Secretary Scott Bessent, a former hedge-fund executive. Waller is also seen by Fed watchers as a possible pick.
