18-4-2025 – US President Donald Trump has intensified his criticism of Federal Reserve Chairman Jerome Powell, lambasting the central banker’s cautious stance on monetary policy and renewing calls for his dismissal. Writing on Truth Social in the early hours, Trump branded Powell’s recent economic assessment as utterly misguided, accusing the Fed chief of perpetually lagging behind global counterparts. He pointed to the European Central Bank’s anticipated seventh interest rate reduction as evidence that the US should follow suit, asserting that inflation is firmly in check and that lower rates are essential to bolster economic growth.
Trump’s remarks come on the heels of Powell’s address at the Economic Club of Chicago, where the Fed chair staunchly defended the institution’s independence. Powell underscored that the Federal Reserve’s autonomy is enshrined in law, enjoying widespread bipartisan backing in Congress. He dismissed any suggestion that the Fed would bow to political pressures, declaring that decisions would remain insulated from external influences. “Our mandate is clear, and we will not be swayed by political rhetoric,” Powell affirmed, reinforcing that only Congress holds the power to amend the Fed’s governing statutes—a prospect he deemed improbable.
The President’s latest outburst is part of a broader campaign to pressure the Fed into slashing interest rates, a demand he has voiced repeatedly since the outset of his second term. In a virtual speech to the World Economic Forum in January, Trump insisted that declining oil prices created room for rate cuts to combat inflation. Despite the Fed’s decision to hold rates steady at 4.25%-4.5% last month, with inflation recorded at 2.9% in December—above the Fed’s 2% target—Trump has argued that his economic strategy, centred on energy expansion, deregulation, and revitalised manufacturing, would address any fiscal challenges. He has also linked rate reductions to offsetting the economic effects of his proposed tariff hikes.
Adding to the fray, US Treasury Secretary Scott Bessent revealed plans to begin interviewing candidates this autumn to replace Powell, whose term concludes in May 2026. While Bessent publicly endorsed the Fed’s independence and noted regular discussions with Powell, he dismissed concerns of imminent financial instability. However, alarm bells have been sounded by Democratic Senator Elizabeth Warren, a vocal critic of cryptocurrency and former chair of the Senate Banking Committee’s economic policy arm. Warren warned that ousting Powell could precipitate a catastrophic market collapse, underscoring the profound risks of destabilising the Fed’s leadership.
