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Donald Trump lashed out at Jay Powell on Thursday, saying the end of the Federal Reserve chair’s tenure “cannot come fast enough” as he accused him of failing to lower interest rates quickly enough.
The US president said in a post on his Truth Social platform that Powell was “always TOO LATE AND WRONG”. He added that the Fed chief “should have lowered Interest Rates, like the [European Central Bank], long ago, but he should certainly lower them now. Powell’s termination cannot come fast enough!”
It was not clear whether Trump was referring to the planned end of Powell’s term as chair, which is scheduled for May 2026, or an intention to remove him from his role sooner.
The ECB cut its benchmark interest rate by a quarter-point to 2.25 per cent on Thursday amid concerns that Trump’s trade war will hit growth. The US president convulsed global markets when he announced steep “reciprocal” tariffs on dozens of US trading partners, before implementing a 90-day pause.
The Fed has so far kept rates on hold this year after lowering them three times in a row in 2024, including a large half-point move in September. Officials have signalled that they are unlikely to cut rates at their next meeting in May, as they await more clarity on the impact of Trump’s tariffs.
In a speech on Wednesday, the Fed chair, who was appointed by Trump in 2018, warned that the US president’s sweeping duties would lead to slower economic growth and higher inflation.
Powell said Trump’s tariffs had been “significantly larger than anticipated”, and could put US rate-setters in a “challenging scenario” in which their dual-mandate goals of price stability and maximum employment are in tension.
Trump has been a frequent critic of Powell, urging him to lower borrowing costs. Earlier this month, the US president wrote on Truth Social: “CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!”
But in December, Trump told NBC News that he would not try to oust Powell from his position before his term ended. “No, I don’t think so. I don’t see it,” Trump said.
The Fed chair has said repeatedly that he intends to serve his full term and on Wednesday claimed the US central bank’s independence to set interest rates as it sees fit was “a matter of law”.
He added: “We’re never going to be influenced by any political pressure. People can say whatever they want . . . but we will do what we do strictly without consideration of political or any other extraneous factors.”
ECB president Christine Lagarde gave her support to Powell on Thursday, telling a press conference in Frankfurt that she had “a lot of respect for my esteemed colleague and friend”.
She declined to comment further on Trump’s criticism, but said that central bank independence was a “fundamental” principle within the Eurozone and that the ECB’s “good” relationship with the Fed helped underpin global financial stability.
“We have demonstrated in the past that we could actually operate on that basis and we will continue doing so in an undeterred and unchanged manner I’m sure,” Lagarde said of the relations between the central banks.
Global markets remained steady following Trump’s latest broadside, with the S&P 500 up 0.2 per cent by late morning trading. The yield on the 10-year US Treasury was up 0.04 percentage points at 4.32 per cent.
“Powell knows that Trump will always hate on him whatever he does, and there is no point trying to please him,” said Mark Dowding, chief investment officer for fixed income at RBC BlueBay Asset Management.
Additional reporting by Olaf Storbeck in Frankfurt
