President Trump threatens to fire Federal Reserve Chair Jerome Powell amid stock market decline, setting up a battle between the White House and America’s central bank.
Key Takeaways
- President Trump criticized Fed Chair Powell for not cutting interest rates, blaming him for recent stock market drops
- Trump suggested Powell should be fired, calling his leadership “too late” compared to the European Central Bank
- Powell defended Fed independence, stating decisions are based on economic data, not political pressure
- Powell’s term ends in May 2026, though he maintains the president lacks authority to terminate him
- Economic tensions highlight growing conflict between White House policy goals and Federal Reserve independence
Trump Slams Powell Over Interest Rate Policy
President Donald Trump has launched a scathing attack on Federal Reserve Chair Jerome Powell, blaming him for the recent downturn in the stock market due to his refusal to cut interest rates. The criticism comes as markets experienced significant volatility, with Trump pointing to the European Central Bank’s decision to lower rates as evidence that Powell is behind the curve. Trump’s frustration with Powell has escalated to the point of suggesting termination, highlighting the growing tension between the administration’s economic priorities and the Federal Reserve’s independence.
The President specifically targeted Powell’s approach to monetary policy, accusing him of being “too late” in making critical decisions affecting the economy. Trump’s comments reflect his long-standing belief that lower interest rates would stimulate economic growth and strengthen the market. The criticism intensified after Powell issued what Trump characterized as a “complete mess” of a report, suggesting that the Fed Chair’s analysis and projections were fundamentally flawed and harmful to American economic interests.
Why is the #US stock market falling?
While Trump’s #tariffs are the biggest and most immediate trigger for the sharp selloff in the US stock market, several other key factors also appear to have contributed to the downtrend on Wall Street.
1. Trade war jitters:
Trump's… pic.twitter.com/vPJmWjfQDG
— Markets Today (@marketsday) April 5, 2025
Powell Defends Fed Independence
Despite facing intense pressure from the White House, Powell has stood firm in defending the Federal Reserve’s independence and decision-making process. Powell, who was initially nominated by Trump in 2017 and later renominated by President Biden in 2021, has emphasized that the Fed’s decisions are based on economic data and analysis rather than political considerations. This stance underscores the traditional separation between monetary policy and executive branch influence that has characterized American economic governance for decades.
“Generally speaking, Fed independence is very widely understood and supported in Washington, in Congress, where it really matters,” said Jerome Powell.
Powell has specifically addressed concerns about higher tariffs from the Trump administration, suggesting they could lead to inflation and job losses. This economic analysis forms part of the justification for maintaining current interest rates, despite political pressure to reduce them. Powell’s term extends until May 2026, providing a potential four-year period of conflict between the President and the Fed Chair if their economic philosophies remain at odds.
History of Tension Between Trump and Powell
This is not the first time President Trump has expressed dissatisfaction with Powell’s leadership at the Federal Reserve. Throughout his previous administration, Trump frequently criticized Powell’s monetary policy decisions and has previously threatened termination. These recurring tensions highlight fundamental differences in economic philosophy between Trump’s growth-focused approach and the Fed’s dual mandate of maintaining price stability while maximizing employment.
“We’re never going to be influenced by any political pressure. People can say whatever they want. That’s fine with — that’s not a problem, but we will do what we do strictly without consideration of political or any other extraneous factors,” Jerome Powell said.
Powell has consistently maintained that the president does not have the authority to fire a Fed Chair, pointing to the institutional safeguards designed to protect the central bank’s independence. This position reflects the broader principle that monetary policy should be insulated from short-term political pressures to ensure long-term economic stability. As markets react to this high-profile disagreement, analysts continue to watch closely for signals about the future direction of both fiscal and monetary policy under the current administration.
