Trump Demands Fed Board Take Control From Chair Powell

WASHINGTON (AP) — President Donald Trump on Friday called for the Federal Reserve‘s board of governors to take control from Fed Chair Jerome Powell, criticizing him for not cutting short-term interest rates. Trump made the remarks on his Truth Social platform, labeling Powell as “stubborn.” This marks an escalation in Trump’s ongoing criticism of the Federal Reserve, which has the crucial role of stabilizing prices and maximizing employment.

This year, Powell has kept the benchmark rate for overnight loans steady, emphasizing the need to assess the impact of Trump’s tariffs on inflation. Trump argued that if Powell does not lower rates “substantially,” the board should step in and take action. He believes that lower rates would lead to stronger economic growth and reduced borrowing costs for both the federal government and homebuyers.

Currently, the Fed’s preferred inflation measure is at 2.6%, slightly above its 2% target. Despite this, Trump contends that inflation is virtually nonexistent and has proposed a dramatic reduction of the benchmark rate by 3 percentage points, from its current average of 4.33%.

Critics warn that such a large cut could inject excessive liquidity into the economy, potentially exacerbating inflation concerns. The Supreme Court ruled this past May that Trump cannot remove Powell over policy disagreements, prompting the White House to explore whether Powell could be dismissed for other reasons, such as cost overruns in Fed renovation projects.

Powell’s term as chair will conclude in May 2026, allowing Trump the opportunity to appoint a Senate-confirmed successor. Trump’s recent comments signal his desire for greater control over the Federal Reserve, one of the few remaining independent agencies.