President Donald Trump on Wednesday slammed Federal Reserve Chair Jerome Powell and the U.S. central bank, saying they “failed to stop the problem they created with Inflation” and have done a “terrible job on Bank Regulation.”
Trump delivered the broadside on Truth Social two hours after the Fed opted to maintain a key interest rate at its current level. It was the first rate decision of Trump’s term.
In the Truth Social post just after 4:15 p.m. EST, Trump criticized “Jay Powell and the Fed” and claimed he will have to stop inflation by “unleashing American Energy production,” and “reigniting American Manufacturing.”
“If the Fed had spent less time on DEI, gender ideology, “green” energy, and fake climate change, Inflation would never have been a problem,” Trump said in the post.
Trump’s rant came hours after the Federal Reserve announced it would keep interest rates at the same level set last month—at 4.25% to 4.5%—despite cutting rates several times last year, leaving borrowing costs relatively high after the Fed hiked rates in 2022 and 2023 in a bid to quell sky-high inflation.
In its announcement, the Fed’s policy-setting Federal Open Market Committee cited unemployment stabilizing and inflation staying “somewhat elevated,” both things that point to fewer interest rate cuts, and an “uncertain” economic outlook.
Trump previously said he would “demand that interest rates drop immediately,” and has often pushed for lower rates, which can boost economic growth, but at the risk of sparking inflation.
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The comments were the latest by Trump about Powell amid a rocky history between the pair, the latter of whom was appointed by Trump in 2017 but has been regularly criticized by him since.
Key Background
Powell was appointed by Trump during his first term, though the president has taken issue with Powell’s setting of interest rates, saying in 2019 he was “disappointed” in the pace of cuts. Trump was critical of Powell and the Fed a number of times in his first term for not lowering rates fast enough, once saying it should cut interest rates to zero or lower so the U.S. could “start to refinance our debt.” Powell was reappointed in 2021 by Biden, and is serving a four-year term that runs through May 2026. He is also serving a 14-year term on the Fed board that ends in 2028, Bloomberg reported. Trump has acknowledged his disputes with Powell, though, telling Bloomberg last year ahead of the election that he intended to let Powell “serve it out, especially if I thought he was doing the right thing.” Powell, for his part, said he would not resign if asked to do so by Trump, and recently said he has not had contact with the president. He said Wednesday “the public should be confident that we will continue to do our work.” Typically, the president appoints the Federal Reserve chairman and governors but he does not have say over the Fed’s decisions as it operates independently from the rest of government.
Can Trump Fire Powell?
It’s a legal gray area, according to American think tank Brookings, which said there is no statute detailing whether a president can remove a fed chair and no president has tried, so there hasn’t yet been a legal test.
Though Trump said he won’t fire Powell and will let him serve the remainder of his term, he has also expressed the belief that the president “should have at least say” in determining interest rates—despite the Federal Reserve’s long history of operating separately from the federal government.
