On Tuesday, President Trump said he has “no intention of firing” Jerome Powell, the head of the Federal Reserve, even though he criticized him just a day earlier. On Monday, Trump called Powell a “major loser” and demanded the Fed lower interest rates faster.
When reporters asked him if he plans to fire Powell, Trump replied, “never did,” and blamed the media for spreading false stories. But he still wants Powell to reduce interest rates, saying, “This is a perfect time to lower interest rates.” He added, “If he doesn’t, is it the end? No. But it would be good timing.”
Last week, Trump posted online that Powell is “always TOO LATE AND WRONG” and said his “termination cannot come fast enough,” raising concerns he might try to remove Powell before his term ends next year.
Powell became Fed chair in 2018 after Trump first nominated him. President Joe Biden later nominated him for a second term, which runs until at least May 2026.
It’s not clear if Trump has the power to fire Powell. Federal law says Fed board members can only be removed “for cause” — meaning serious wrongdoing. However, Trump’s team believes the president might have legal grounds to remove him, and they’re looking into it.
Powell has said before that he won’t step down, even if Trump asks him to.
Why Is Trump Criticizing Powell?
Trump is upset because the Federal Reserve has not cut interest rates this year, after only lowering them once in late 2024. Lower interest rates can help boost the economy and reduce borrowing costs, which Trump supports. But the Fed worries that cutting rates too soon could make inflation worse.
Although inflation has gone down since its peak in 2022, it’s still above the Fed’s target of 2% a year. Powell has said that economic uncertainty — and Trump’s high tariffs on imports — could increase inflation and hurt growth.
Read More: Protests Erupt Across the U.S. – Find Out Why America is Rising Against Trump!
In response, Trump called Powell “Mr. Too Late” and insisted that “there is virtually no inflation” so the Fed should cut rates now.
This conflict has raised concerns about whether the Federal Reserve can stay independent — meaning free from political pressure. Investors worry that Trump might try to take control of the Fed’s decisions. On Monday, these concerns caused stock prices to fall, though they bounced back on Tuesday.
Chicago Fed President Austan Goolsbee said on Face the Nation that losing Fed independence would “undermine the credibility” of the central bank. He warned that countries without independent central banks often suffer from high inflation, weak economic growth, and fewer jobs.
Despite the tension, White House press secretary Karoline Leavitt said Trump has a right to voice his opinion. She added that Trump believes the Fed is making decisions for political reasons.
Also See: Trump Wants to Fire Fed Chair Powell—What Happens If a President Actually Tries?
Trump has clashed with Powell before — criticizing him in 2018 for raising interest rates, then praising him during the 2020 pandemic when the Fed cut rates sharply.
