President Donald Trump cited new inflation data as he continued to put pressure on Federal Reserve Chair Jerome Powell to lower interest rates.
Trump called Powell a ‘numbskull’, but added that he would not seek to remove him.
“We can’t get this guy to do it,” Trump said, referring to Powell’s refusal to lower rates. “And the fake news is saying, ‘Oh, if you fired him, it would be so bad.’ I don’t know why, but I’m not going to fire him.”
Trump described the latest inflation numbers as “incredible” during a 12 June event at the White House. Inflation increased slightly in May, but remained more stable than expected, as the initial impact of Trump’s wide-ranging tariffs was offset by a further decline in gasoline prices.
On 12 June, Trump complained that higher interest rates were costing the U.S. more money in debt payments because of “one numbskull”. He has been pressuring Powell for months to cut rates, and Powell met with the president at the White House last month. According to a Fed statement and the White House press secretary, Trump continued to press his case, but Powell said he won’t take politics into account when setting monetary policy. The Fed left its key rate unchanged at the end of its May meeting, and gave no indication that it plans to lower it soon, citing ‘uncertainty’. The central bank lowered the rate by a percentage point late last year as a pandemic-related price surge eased, but has paused cuts for three consecutive meetings.
More: Trump’s criticism of Fed chief Powell has a long history, but the latest could be the most damaging.
The Fed’s next meeting is scheduled for 17–18 June.
Trump has repeatedly attacked the Fed leader, but has backed off from suggestions that he could have Powell removed. Trump’s attacks on Powell date back to shortly after he appointed him in 2017.
U.S. President Donald Trump looks on as his nominee to lead the U.S. Federal Reserve, Jerome Powell, moves to the podium at the White House in Washington, U.S. 2 November 2017.
“I’m not happy with him… if I want him out, he’ll be out of there real fast, believe me,” Trump told reporters during a White House event on 17 April.
The Federal Reserve Act of 1913 stipulates that Fed officials may be dismissed only “for cause”, not for political or policy disagreements.
Powell has said that he believes his dismissal would not be permitted by law. The seven governors of the Federal Reserve System, including the chair, are appointed by the president and confirmed by the Senate. Powell’s term ends in May 2026, and Trump is expected to nominate a successor in the coming months. White House economic adviser Kevin Hassett said on 18 April that the president and his team were studying whether they could fire Powell. However, Trump later stated that he had ‘no intention of firing’ the Fed chair. In April, Powell warned about the impact of Trump’s tariffs on inflation. Speaking to the Economic Club of Chicago, he said that ‘unemployment is likely to rise as the economy slows down, and inflation is likely to rise as tariffs are introduced and some of those costs are passed on to the public’.
In general, the Fed cuts interest rates to stimulate a struggling economy and job market. It increases interest rates — or keeps them higher for longer — to lower inflation or prevent a spike in prices.
