WASHINGTON (Reuters): U.S. President Donald Trump said on Friday the Federal Reserve (Fed) board should “assume control” if Fed Chair Jerome Powell continues to refuse to lower interest rates.
Posting on his Truth Social platform, Trump called Powell “stubborn.” The Fed chair has been subjected to vicious verbal attacks by the Republican president over several months.
“Jerome ‘Too Late’ Powell, a stubborn MORON, must substantially lower interest rates, NOW,” Trump said. “IF HE CONTINUES TO REFUSE, THE BOARD SHOULD ASSUME CONTROL, AND DO WHAT EVERYONE KNOWS HAS TO BE DONE!” he added.
The U.S. central bank held interest rates steady on Wednesday and Powell’s comments after the decision undercut confidence that borrowing costs would begin to fall in September, stoking the ire of Trump, who has demanded immediate and steep rate relief.
The Fed has the responsibility of stabilizing prices and maximizing employment. Powell has held its benchmark rate for overnight loans constant this year, saying that Fed officials needed to see what impact Trump’s massive tariffs had on inflation.
The latest policy decision was made by a 9-2 vote, which passes for a split outcome at the consensus-driven central bank, with two Fed governors dissenting for the first time in more than 30 years.
The seven members of the Fed Board of Governors are nominated by the president and confirmed by the U.S. Senate.
Trump has repeatedly demanded the Fed cut interest rates, citing moves by the European central banks and warned that delays could stall the U.S. economy.
He sees the rate cuts as leading to stronger growth and lower debt servicing costs for the federal government and homebuyers. The president argues there is virtually no inflation, even though the Fed’s preferred measure is running at an annual rate of 2.6%, slightly higher than the Fed’s 2% target.
Trump has called for slashing the Fed’s benchmark rate by 3 percentage points, bringing it down dramatically from its current average of 4.33%. The risk is that a rate cut that large could cause more money to come into the economy than can be absorbed, possibly causing inflation to accelerate.
Trump has previously denied reports that he is looking to fire Powell before the Fed chair’s term ends next year, calling such a move “highly unlikely,” but left the door open to taking action over what he called “possible” fraud.
The Supreme Court suggested in a May ruling that Trump could not remove Powell for policy disagreements. This led the White House to investigate whether the Fed chair could be fired for cause because of the cost overruns in its $2.5 billion renovation projects.
Powell’s term as chair ends in May 2026, at which point Trump can put his Senate-confirmed pick in the seat.
