President Trump on Thursday escalated his long-running attack on the Federal Reserve, by lashing out repeatedly at the head of the nation’s central bank, Jerome H. Powell, for not doing enough to fortify the economy as the effects of tariffs take hold.
Mr. Trump has long sought to exert control over the politically independent Fed, often denouncing Mr. Powell for keeping interest rates too high for his liking. In an early morning social media post that ricocheted around Washington, Wall Street and beyond, Mr. Trump reprised those attacks, saying: “Powell’s termination cannot come fast enough!”
The president continued his offensive in the afternoon, accusing Mr. Powell of “playing politics.” Speaking from the White House, Mr. Trump said, “If I want him out, he’ll be out of there real fast, believe me.”
Mr. Trump’s broadsides arrived a day after Mr. Powell warned in a speech that the president’s tariffs could create a “challenging scenario” by putting the Fed’s two main goals — stable inflation and a healthy labor market — in tension.
Advertisement
SKIP ADVERTISEMENT
The Fed chairman has maintained that the nation’s central bank must be patient on interest rates — one of the main tools the central bank has to help steer the economy — as it assesses the full impact of the president’s policies on prices. Mr. Powell emphasized on Wednesday that the Fed wanted to ensure that any temporary rise in inflation from tariffs do not become a more persistent problem, in comments broadly interpreted to suggest that the bar for further rate cuts was high.
The president has been pushing for Mr. Powell to cut rates since returning to the White House. The Fed last lowered rates in December and held them steady for two consecutive meetings this year. Traders overwhelmingly expect the Fed to maintain rates at its next meeting in early May.
On Thursday, Mr. Trump referred to the European Central Bank, which has been steadily cutting rates, suggesting that the Fed should do the same.
“The ECB is expected to cut interest rates for the 7th time, and yet, ‘Too Late’ Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete ‘mess!’,” Mr. Trump wrote on his Truth Social platform. “Oil prices are down, groceries (even eggs!) are down, and the USA is getting RICH ON TARIFFS. Too Late should have lowered Interest Rates, like the ECB, long ago, but he should certainly lower them now. Powell’s termination cannot come fast enough!”
As expected, a few hours later E.C.B. policymakers cut rates for their seventh consecutive meeting. The reason, they explained, was that the outlook for the eurozone, which is forecast to grow more weakly than the U.S. economy, had darkened.
Advertisement
SKIP ADVERTISEMENT
Falling oil prices have reflected deepening concern that tariffs could slow economic growth and perhaps even cause a recession. Adding to those concerns, inflation in the United States, while cooling, remains higher than the Fed’s target. Retail prices for everyday products, like eggs and other groceries, continue to climb. Fears that tariffs could push prices even higher has led to deteriorating consumer confidence.
The Fed seeks to steer the economy free from political influence, something that Mr. Powell on Wednesday said was a “matter of law.” He also said the Fed’s independence was “very widely understood and supported in Washington and in Congress where it really matters.”
Many legal experts agree that the president probably does not have the authority to fire the Fed chair over a policy disagreement, although that has not been tested in court. The president nominates members to the central bank’s Board of Governors, who are confirmed by the Senate and typically serve 14-year terms. From those members, the president nominates a chair to serve a four-year term.
“People can say whatever they want,” Mr. Powell said on Wednesday. “That’s fine. That’s not a problem, but we will do what we do strictly without consideration of political or any other extraneous factors.”
Presidents have long sought to put pressure on central bank officials, but the fear across Wall Street and Washington is that Mr. Trump will seek to undermine the central bank’s independence in a more significant way.
Advertisement
SKIP ADVERTISEMENT
The top concern is that he will try to remove Mr. Powell from his leadership position before his term as chair expires in May 2026. Mr. Trump has already signed an executive order trying to seize more control over the central bank’s responsibilities related to bank regulation. (The order exempted the Fed’s decisions on interest rates.)
In his attacks on Thursday, Mr. Trump did not say if he would actually take steps to fire the Fed chair before the scheduled end of his term next year.
“He’s going to have a lot of political pressure,” the president later said.
This week, the Treasury Secretary Scott Bessent said in an interview with Bloomberg Television that he has been considering who will replace Mr. Powell and that he expects to begin interviewing candidates in the fall.
Asked about the independence of the Fed and the possibility that Mr. Trump could oust Mr. Powell, Mr. Bessent said, “I believe that monetary policy is a jewel box that’s got to be preserved.” He said that he had “no concern” that Mr. Trump would try to prematurely remove the chair.
Mr. Trump has taken more direct aim at other independent agencies, including by firing officials at the Federal Trade Commission, the Merit Systems Protection Board and the National Labor Relations Board.
Advertisement
SKIP ADVERTISEMENT
Earlier this month, Chief Justice John G. Roberts Jr. temporarily allowed the Trump administration to remove the leaders of two independent agencies while their challenges to the dismissals move forward in court.
The chief justice, acting on his own, issued an “administrative stay,” an interim measure intended to give the justices some time while the full Supreme Court considers the matter.
Mr. Powell on Wednesday said that he did not expect the court’s decision to apply to the Fed, but that the central bank was “monitoring carefully” the situation.
Eswar Prasad, a professor at Cornell University, called Mr. Trump’s latest broadside at Mr. Powell and the Fed a “a stunning and deeply disturbing attack” that could erode America’s leading role in global financial markets. “Trump’s assault on the Fed’s independence, which is clearly just getting started, threatens to damage the Fed’s monetary policy credibility and unravel domestic and foreign investors’ faith in the dollar,” he added.
Mr. Trump spent much of his first term jawboning Mr. Powell and the Fed to cut rates, calling the Fed chair an “enemy” and central bankers “boneheads.” He also repeatedly threatened to fire Mr. Powell. While Mr. Trump elevated Mr. Powell to chair in 2018, the president soon soured on his choice as the Fed held rates steady. Mr. Powell was later renominated to a second term as chair by the Biden administration.
Advertisement
SKIP ADVERTISEMENT
After Mr. Trump won a second presidential term in November, Mr. Powell delivered a stern “no” when asked by a reporter if he would resign if the president asked him to.
Mr. Trump’s call for lower interest rates comes amid turbulence in financial markets. His tariff policies have rattled the bond market in particular, with the yields on Treasury bonds rising so sharply at one point that it prompted the president to back off and put a 90-day pause on many tariffs.
The Fed sets a few very short-dated interest rates that then ripple out across financial markets, but its influence is limited on the 10- and 30-year Treasuries, whose yields are set by market investors.
Mr. Trump was correct in saying that oil prices have been falling. But in addition to recession worries, the cartel known as OPEC Plus plans to pump more oil, beginning in May, setting off concern that supply may outstrip demand.
Although the wholesale price of eggs has fallen by roughly half since the start of Mr. Trump’s second term, egg prices at the grocery store have continued to climb, although at a slower pace in recent months. They rose 5.9 percent in March, according to the latest official statistics.
Advertisement
SKIP ADVERTISEMENT
Traders are betting that the E.C.B. will cut rates two or three more times this year. Officials at the central bank said on Thursday that household and business confidence was likely to fall, and “adverse and volatile market response to the trade tensions” could make it harder to get access to loans.
Inflation across Europe has cooled, giving policymakers there room to cut interest rates. Price increases may continue to slow because of a strengthening euro, falling commodity prices and the possibility of a flood of cheap Chinese goods redirected to Europe to avoid U.S. tariffs.
The U.S. economy is forecast to grow considerably faster than that of the eurozone this year and next. Most Fed officials have taken the view that the inflationary impact from tariffs on the United States should not be underestimated. Mr. Powell on Wednesday reiterated that it was the Fed’s “obligation” to ensure that “a one-time increase in the price level does not become an ongoing inflation problem.”
Christine Lagarde, the president of the E.C.B., was asked at a news conference on Thursday about the Fed’s independence in light of Mr. Trump’s latest attack on Mr. Powell. “I have a lot of respect for my esteemed colleague and friend Jay Powell,” she said.
Eshe Nelson and Alan Rappeport contributed reporting.