The president escalated his criticism of Powell over the Fed’s decision to keep interest rates steady. “I’d love him to resign if he wanted to,” Trump said. He called the central bank chief “a stubborn mule and a stupid person” for not supporting rate cuts.
Trump has unleashed a pressure campaign on the central bank to cut rates, repeatedly assailing Powell and arguing the Fed’s policies are keeping government borrowing costs too high.
Powell’s term as chair runs through May of next year. Trump has said he has three or four people in mind to succeed him in the post, but Treasury Secretary Scott Bessent has downplayed speculation that the president may consider a quick move.
Bessent on Friday signalled Trump may announce a pick later this year in advance of the board’s next opening, which is in January, with the intention of having that person serve as chair.
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“There is a chance that the person who is going to become the chair could be appointed in January, which would probably mean an October, November nomination,” Bessent told CNBC. Powell’s term on the board, separate from his role as governor, runs until 2028.
Trump’s comments risk further clouding the once ironclad notion of Fed independence. Trump criticized Powell during both of the his two public events Friday, highlighting his ire at the bank chief.
“We have a Fed guy that doesn’t understand what happening,” he said. Trump also called Powell a “very stupid person” with “low IQ for what he does” during a press conference earlier this week at the NATO leaders’ summit.
See also: Powell’s Jackson Hole signal on rates seen as good for one cut
Federal Reserve officials indicated last week that they expect to lower borrowing costs by a half percentage point by the end of the year, implying two quarter-point rate cuts. Several policymakers said this week they’ll need a few more months of data to gain confidence that tariffs aren’t leading to persistent inflation, tempering expectations for a rate cut at the Fed’s next meeting in July.
The US central bank left rates unchanged last week in a range of 4.25%-4.5%, where they’ve been since the beginning of the year. Powell told lawmakers this week the Fed would probably be cutting rates by now, based on declining inflation, if not for the uncertain outlook for future prices because of tariffs. In the meantime, there was no need to rush into any rate changes.
Data out Friday showed inflation remained muted in May, though many economists expect that it will pick up in the next few months as businesses increasingly pass higher import duties on to households.
