Trump renews call for interest rate cut, says rates would be lower if Fed chief Powell ‘understood what he was doing’

President Donald Trump criticized Federal Reserve Chair Jerome Powell once again on Friday, as tensions between the White House and the economic policy leader reach a peak. Trump indicated during a press briefing that prices were decreasing and suggested that interest rates should follow suit if the Fed Chair understood his role. The President has persistently advocated for a reduction in interest rates set by the Federal Reserve. The latest remarks come amidst escalating attacks on Powell from the White House.

White House economic advisor Kevin Hassett mentioned that Trump’s team is exploring the possibility of removing Powell from his position, despite Powell’s assertion that he cannot be dismissed and plans to serve until 2026. Trump’s recent comments, including a post on Truth Social, have sparked speculation about Powell’s potential premature removal. The President’s criticism was fueled by Powell’s remarks on how Trump’s tariff policies could impact inflation and the Fed’s objectives related to employment and price stability.

Powell’s comments at the Economic Club of Chicago highlighted the potential challenges posed by the tariff plan on the Federal Reserve’s goals. The Federal Open Market Committee currently maintains a borrowing rate range of 4.25% to 4.5%, with expectations that rates will remain unchanged at the next policy meeting. As Trump intensifies his critiques, Democrats like Senator Elizabeth Warren have cautioned against the repercussions of a President firing the Fed chief, warning that it could have severe consequences on U.S. financial markets.