Former President Donald Trump is returning to his favorite punching bag—the Federal Reserve. He calls on the Fed’s Chairman Jerome Powell to hold interest rates at a lower level. The European Central Bank (ECB) is holding its seventh rate cut in as many months. In retaliation, Trump publicly lambasted Powell’s stewardship of the Fed in a speech at the Economic Club of Chicago.
Previously during his address, Powell, himself acknowledged the economic turmoil that the administration’s tariffs have caused. This lends the central bank a highly awkward position. Against this backdrop, Trump has repeatedly asserted that Powell should have done so earlier and raised interest rates more significantly. Tweeting on Sunday, Donald Trump said, “a PERFECT time for Fed Chairman Jerome Powell to lower Interest Rates. He’s forever ‘behind the curve,’ but he would be able to flip that on its head—potentially, and soon.
Trump’s criticism of Powell is not new. Tellingly enough, he has early and often made known his displeasure at the Fed’s handling of U.S. monetary policy. So after Powell’s most recent report – which Trump has referred to as yet another “total disaster” – he doubled down on his calls for action. The former president is convinced a short, quick reduction in rates would substantially revive the economy. This is particularly urgent right now as the ECB is undertaking unprecedented measures to drive growth in Europe.
Earlier this week, entrepreneur-in-residence at Mar-a-Lago, Donald Trump took to social media to declare. He tweeted the USA is getting “RICH ON TARIFFS,” suggesting that the administration’s tariffs are providing a tasty fiscal wellspring. He argues that despite this progress, the Fed’s current approach is holding back the economy from making even greater strides.
Powell’s term as Fed chairman runs through May of 2026, but for his part, Trump has made clear multiple times that he wants to see him fired. Powell has pushed back against such speculation, most recently in Senate testimony, claiming that the president lacks the statutory authority to fire him.
As the ECB prepares to announce its rate cut later this Thursday, market observers are closely watching how these developments could influence U.S. monetary policy. Their continuing fight over interest rates gives away the most significant fault line between Trump and Powell. Both men are busy finding their feet in an increasingly digital and global economic order.