- President Trump criticized Federal Reserve Chairman Jerome Powell, calling him a “fool” on Truth Social, while the Fed maintained its benchmark interest rate at 4.25% – 4.5% amid tariff-related economic uncertainty.
- Despite Trump’s pressure for rate cuts and past threats to fire Powell before his May 2026 term end, Powell reaffirmed the Fed’s focus on data-driven decisions to ensure employment and price stability.
President Donald Trump’s ongoing feud with Federal Reserve Chairman Jerome Powell intensified on Thursday, as Trump lambasted Powell on Truth Social, calling him a “fool” who “doesn’t have a clue” while paradoxically expressing personal fondness. This outburst followed the Federal Reserve’s decision on Wednesday to maintain its benchmark interest rate between 4.25% and 4.5%, a range unchanged in the three meetings this year since a rate cut in December. Trump’s frustration stems from his desire for lower rates to offset potential economic slowdowns tied to his tariff policies, which have introduced uncertainty into markets. The Fed, however, cited heightened risks of both unemployment and inflation, opting for caution until the economic impact of Trump’s trade measures clarifies. The central bank’s stance reflects its commitment to data-driven decisions, with Powell emphasizing in a news conference that the Fed’s focus remains on fostering maximum employment and price stability, unaffected by political pressures.
Trump’s rhetoric, claiming low inflation, falling costs for groceries and energy, and tariff-driven revenue, contrasts sharply with the Fed’s concerns about inflationary pressures from his trade policies. Last month, Trump’s threats to potentially fire Powell before his term ends in May 2026 rattled investors, contributing to a market sell-off amid tariff implementations. However, in late April, Trump reassured markets by stating he had “no intention” of removing Powell, a move that, alongside pausing some high reciprocal duties, stabilized investor sentiment. The broader context highlights the delicate balance between monetary policy and political agendas, with the Fed navigating a complex economic landscape shaped by global trade dynamics and domestic policy shifts. Powell’s insistence on prioritizing economic data over external criticism underscores the Fed’s independence, critical as markets brace for potential volatility driven by tariffs and geopolitical tensions.
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