WASHINGTON — Former President Donald Trump aired his frustrations with the Federal Reserve on Friday, urging its board of governors to take charge from Fed Chair Jerome Powell. Trump believes Powell’s reluctance to lower short-term interest rates is hindering economic growth.
On his Truth Social platform, Trump described Powell as “stubborn,” highlighting a pattern of criticism aimed at the leader of the U.S. central bank over recent months.
The Federal Reserve plays a crucial role in maintaining price stability and fostering job growth. However, Powell has opted to keep interest rates steady this year, citing the need to assess the effects of Trump’s significant tariffs on inflation.
Trump tweeted that if Powell doesn’t lower rates soon, “THE BOARD SHOULD ASSUME CONTROL, AND DO WHAT EVERYONE KNOWS HAS TO BE DONE!”
Two Federal Reserve governors, Christopher Waller and Michelle Bowman, expressed differing opinions, suggesting that the tariffs may only have a temporary effect on prices and employment. They called for modest rate cuts, though not as drastic as Trump has advocated.
Despite claiming that the economy is thriving, Trump welcomed Waller and Bowman’s strong dissenting opinions within the Fed.
Later on Friday, the Federal Reserve announced that governor Adriana Kugler would step down, prompting Trump to suggest that Powell should consider following suit. “She knew he was doing the wrong thing on Interest Rates. He should resign, also!” he stated on social media.
Recent economic data showed mixed results, with only 73,000 jobs added in July, and revisions lowered previous months’ job growth figures significantly. Trump argues that lowering rates would boost economic growth and reduce debt costs for the government and homebuyers. He downplayed inflation concerns, which is running just above the Fed’s 2% target at 2.6%.
Trump has proposed a bold 3 percentage point reduction of the Fed’s benchmark rate from its current average of 4.33%. However, such a significant cut carries the risk of spawning unsustainable growth and potential inflation.
Legally, the Supreme Court has indicated that Trump cannot dismiss Powell for policy disagreements. This has led Trump’s team to explore whether Powell could be removed for cause due to significant costs associated with the Fed’s renovation projects.
Powell’s term is set to conclude in May 2026, at which time Trump will have the opportunity to appoint a new chair, subject to Senate confirmation.
