Trump Attacks Jerome Powell, Calls for Dramatic Rate Cuts as the American Economy "Rises Rapidly"

On Friday evening, President Donald Trump posted a lengthy and angry message on social media platform Truth Social, in which he made the harshest criticisms to date against the Chairman of the Federal Reserve America (Fed) Jerome Powell. This is Trump's latest move since he returned to the White House five months ago. Trump: "Should Not Have Appointed Powell" Trump believes that his appointment of Powell as the head of the Fed was a major mistake. He stated that Powell has caused America to lose $1 trillion each year by maintaining excessively high interest rates, and referred to Powell as a "moron" and "clearly hates Trump." "I tried being gentle, neutral, and firm with him. But only when I was firm did he pay attention. He is a fool and should not have been given this position," Trump wrote. He also stated that he should have listened to different advice instead of choosing Powell, and criticized President Biden for keeping Powell in office after taking power. Fed's Demand to Cut Interest Rates Immediately to 1–2% Trump believes that now is the ideal time for the Fed to lower interest rates to 1–2%. He stated that this would help America save trillions of dollars in interest payments, especially in the context of a recovering economy, factories reopening, and rising tax revenue from tariffs. "If he is worried about inflation or any other issues, then just lower the interest rates now so we can save, and then raise them again later if needed. But I doubt that will be necessary," Trump emphasized. He concluded the article with a veiled threat implying that he might fire Powell, while urging the Fed Board to overcome Powell's personal will. "Perhaps I will change my mind about firing him? But anyway, his term is about to end!" Afterwards, Trump posted a custom comparison image below to add to the drama:

Meanwhile, the Fed is still divided. On the same day, Chairman Powell and other Fed officials spoke out after the decision to keep interest rates unchanged this week at 4.25%–4.5%. The Fed is currently deeply divided: half want to lower interest rates this year, while the other half does not. Mr. Christopher Waller, a Fed Governor, stated on CNBC that inflation is no longer the main concern, and the Fed should consider cutting interest rates as early as July. "Data from the past few months shows that the inflation trend is quite stable," Mr. Waller said. He also believes that new tariffs will not cause significant inflation and should not be a major factor influencing monetary policy. Waller warns not to wait too long, especially as the labor market is showing signs of strain, such as a high unemployment rate among recent graduates. Mary Daly urges caution In contrast to Waller, Mary Daly – President of the San Francisco Fed – expressed a more cautious viewpoint. She believes that interest rate cuts may be appropriate in the fall, but should not be implemented in July. "Cutting interest rates in the fall would make more sense, unless the labor market deteriorates faster than expected," Daly said, while warning about the inflation risk from tariffs, although she acknowledged that many businesses might bear the costs instead of passing them on to consumers. Will the Fed Cut or Keep Steady? The latest forecast from the Fed shows a clear division: 8 officials believe that interest rates should be cut twice this year, while the remaining 7 do not want any adjustments at all. Supporters of the cuts argue that the appropriate timing could be in September or December. Meanwhile, Trump seems to want to act immediately, despite warnings from experts. Comment Trump is putting the Fed in a difficult position by demanding a significant rate cut while the central bank's internal members are not yet in agreement. If inflation continues to cool and the labor market worsens, Trump's demands may further pressure the Fed in upcoming meetings. However, if Powell is fired – should that happen – it would certainly create shockwaves in the global financial community.