U.S. President Donald Trump reignited his criticism of Federal Reserve Chair Jerome Powell on Wednesday, calling him “the WORST” and “a real dummy” in a social media post. The attack followed the Fed’s decision to leave interest rates unchanged and offer no firm timeline on future rate cuts.
Trump’s comments came in response to an article featuring Bill Pulte, Chair of Freddie Mac and Fannie Mae, who called on Powell to resign if he refuses to lower rates—echoing Trump’s long-standing position. The former president has repeatedly blamed Powell’s reluctance to cut rates for economic strain, warning that it could cost the country billions.
The Fed kept its benchmark interest rate steady at 4.25% to 4.5%, citing persistent inflation concerns. While Powell acknowledged weakening consumer sentiment, slower spending, and a cooling labor market, he remained cautious, pointing to potential inflationary pressure from Trump’s proposed trade tariffs. The Fed maintained projections for two rate cuts in 2025 but reduced its forecast for 2026.
Markets had hoped for a more dovish tone, especially after recent data signaled softening in the U.S. economy. However, Powell reiterated the Fed’s data-driven approach, disappointing rate-cut optimists.
Inflation, which had shown signs of cooling in 2023, has now stalled and may rise again if tariffs are implemented. Trump has hinted at removing Powell from office over his rate policy, though legal experts question whether he has the authority to do so. Powell has confirmed he intends to serve out his term through May 2026.
This ongoing clash underscores growing political pressure on the Fed ahead of the 2024 election cycle and raises concerns about central bank independence amid increasing economic uncertainty.