Even as US President Donald Trump has been raising hell for Jerome Powell’s immediate resignation. Powell, of course, is the current chair of the Federal Reserve. This threat further ramps up Trump’s years-long campaign against Powell. As a reminder, Trump nominated Powell to the role during his initial term.
The root of Trump’s unhappiness is that the Fed is focused on economic growth and taming inflation by raising interest rates. For one, he wants the Fed to cut interest rates to boost the economy. Powell has made clear that the Fed would not have cut this far already. Trump’s own tariff policies have made negative impacts that prevented them from flourishing.
In a rare clarification, US Federal Reserve Chair Jerome Powell, in remarks last week, hinted at the confusion over US interest rates. In an interview about those developments, he told us that that’s exactly how it should be. This concession further highlights the tightrope walk the Fed must perform during a precariously evolving economic landscape.
With high inflation and the likelihood of recession, the Federal Reserve has been focused on talks of interest rate cuts, spurred significantly by recent economic events. Despite Trump’s earlier claims that he had no intention of firing Powell, the president’s latest remarks suggest a shift in his stance.
Aside from Trump’s attacks, Powell is coming under fire from other circles. Bill Pulte, the new director of the Federal Housing Finance Agency, is calling for a crackdown. He has expressed a desire to investigate Powell’s behavior and alleged political bias. Pulte stated, “I am asking Congress to investigate Chairman Jerome Powell, his political bias, and his deceptive Senate testimony, which is enough to be removed ‘for cause’.” This is a charged statement, an indication of how deep concerns are about Powell’s presidency at the Fed.
Last week, Powell responded to a series of investigative reports about extravagant remodeling and spending at the Fed’s headquarters in Washington. He described such reports as “misleading and inaccurate in many, many respects,” attempting to mitigate concerns about financial oversight within the institution.
Powell, nominated by Trump, who did not have a difficult four years. Tensions between the White House and the central bank overshadowed his tenure. The continued war raises alarm over the Federal Reserve’s independence. Experts say it represents a fundamental challenge to the bank’s independence and its ability to operate without political interference.