The bi-weekly roast of Jerome Powell is back again with the latest Trump tweet. In a recent post, the President went all in on the head of the Central Bank, claiming that Powell should lower interest rates from 1% to 2%.
The post comes a couple of days after the latest FOMC meeting, in which the Federal Reserve headlined by Powell himself announced a ‘no-change’ to American interests. Currently, rates are at 4.25%–4.50%, a metric that has been untouched since Trump took office in January.
Powell, who was in charge of combating inflation after one of the most significant crises in our timeline—the 2020/2021 COVID pandemic—notoriously raised rates to their highest level since 2001 as part of the Federal Reserve’s aggressive campaign to bring down soaring inflation.
After reaching the level of 5.50% in July of 2023, the Fed Chairman kept rates steady for seven months. Interest rates would only start coming down in September of 2024, and yet we’ve only seen three interest slashes since the post-pandemic peak.
Now, with interests still being considered high, the U.S. President is going ham on the Fed Chairman — to the point of name-calling him a “very dumb guy”, “an obvious Trump hater”, and a “complete moron”.
Interestingly, Powell was appointed by Trump himself in 2018, something the President regrets: “I listened to someone that I shouldn’t have listened to, and Biden shouldn’t have reappointed him.”
Trump Threatens to Fire Powell
An interesting section of Trump’s post alludes that the President could have the power to effectively fire the head of the Central Bank.
“Maybe, just maybe, I’ll have to change my mind about firing him?”
In theory, presidents can’t fire the Fed chair. In practice, well, no one wants to be the first to find out what ‘for cause’ means when the president tweets about firing you daily.
Such remarks have proven terrible for the U.S. dollar and treasury markets as they inject uncertainty into financial policy. When a sitting President threatens the independence of the Central Bank, markets often interpret it as a threat to the stability of the dollar.
In a similar post earlier this year, Trump’s attacks on Powell ultimately caused bond markets to spike as the potential chaotic state of the relationship between the White House and the Central Bank led to higher demand for better yields.
According to the U.S. President, there is little concern for inflation right now, and especially not in the future, as the United States is, allegedly, about to go on a ride of income from tariffs, as well as new factories being built on U.S. soil.
In that scenario, America would be closer to full employment, and the economic growth would make high interest rates dull. However, as of right now, there are few reports about major changes in tariff negotiations, as negotiations remain tense and largely unresolved. While the U.S. has finalized a trade framework with the United Kingdom and is reportedly close to a deal with China, talks with other key partners—like the European Union and Canada—are still in flux
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