In a bold move, former President Donald Trump has demanded the resignation of Jerome Powell, the chair of the Federal Reserve, citing ongoing frustrations over interest rates and economic policy. "Too Late" should resign immediately!!!" Trump proclaimed in a post on his Truth Social platform, referencing an article that discussed calls for an investigation into Powell's testimonies regarding renovations at the Fed's Washington headquarters. Trump originally nominated Powell during his presidency but has since criticized him for not acting aggressively enough on interest rates, though it's uncertain if Trump holds the legal power to remove him.
Despite Trump's mounting criticisms, he previously stated he had "no intention of firing him." Trump has been an advocate for lower interest rates to stimulate economic growth, while Powell recently indicated that the Fed would have likely reduced rates earlier if it hadn't been for the implications of Trump’s own tariff strategies. When discussing the increased tariffs on global trade during a central banking conference in Portugal, Powell affirmed that economic decisions had been influenced by the president's policies.
In response to Trump's criticisms, the Federal Reserve has refrained from commenting on the allegations. Powell's term, which has been secure since his reappointment by President Joe Biden, runs until May 2026. Notably, Powell has expressed that he would not resign if asked by Trump, stressing the protection offered by federal law against arbitrary removal.
This escalating conflict highlights longstanding tensions between Trump and financial regulators. Bill Pulte, the director of the Federal Housing Finance Agency, has even called for Congress to investigate Powell's supposed political bias in light of his recent Senate testimony, regarding which Powell has asserted that reports of extravagant spending at the Fed were misleading.
As Trump's second term unfolds, the ongoing drama around the Federal Reserve remains a key focus for both domestic and international observers, revealing the complex interplay between politics and economic policies.
