Washington, D.C. — Former President Donald Trump sharply criticized Federal Reserve Chair Jerome Powell on Monday, accusing him of mismanaging interest rates and negatively impacting the U.S. economy. In a handwritten note, Trump expressed his discontent with current Fed policies, stating they have cost Americans “a fortune.”
Trump’s message, written in his characteristic all-caps style, emphasized that Powell is “too late” to act. He called for significant interest rate cuts, claiming they could save the country hundreds of billions of dollars. A copy of his note was shared by White House press secretary Karoline Leavitt during a press briefing, where the note’s content underscored Trump’s frustration over the Fed’s current rates, which have remained between 4.25% and 4.5% since December.
In a separate post on his social media platform, Trump labeled the role of a central banker in the U.S. as one of the easiest yet most prestigious jobs, asserting those in the position have “FAILED” the American people. He suggested that the federal interest rate should be set around 1% or lower, voicing his opinion that Powell and other Federal Reserve officials should feel embarrassed about their performance.
Currently, inflation remains persistent, exceeding the Fed’s 2% target, leading to a delicate situation for policymakers. Trump has previously indicated he would consider firing Powell but has since tempered his rhetoric, urging him instead to resign. The former president’s ongoing criticism amplifies the political stakes surrounding the Federal Reserve, particularly as Powell’s term is set to conclude in May 2024.
Amidst this discussion, Treasury Secretary Scott Bessent is reportedly preparing for a potential transition in leadership at the Fed, signaling an intention for a more traditional handover of power. Bessent indicated that considerations for Powell’s successor could involve internal candidates. One potential candidate, Federal Reserve Governor Christopher Waller, appointed by Trump during his presidency, has publicly expressed a desire for interest rate cuts at the earliest opportunity.
While Trump has explicitly stated he would not appoint anyone to lead the Fed who does not support immediate rate reductions, a faction of Fed officials has begun advocating for these cuts as soon as the board meets next. Analysts from Goldman Sachs have adapted their expectations, now predicting a higher likelihood of an interest rate cut as early as September, based on evolving economic conditions and the lessened impact of tariffs.
The ongoing uncertainty regarding the job market and impending inflation data adds to the complexity of the Fed’s decision-making process. As new employment data is set to be released, it will be pivotal in shaping the economic landscape and the Fed’s approach to interest rates in the coming weeks.
Despite the pressures from former President Trump and some analysts, Federal Reserve Bank of Atlanta President Raphael Bostic has expressed caution, advocating for patience in monetary policy adjustments. He emphasized the importance of allowing time for economic indicators to stabilize before making hasty decisions.
With crucial meetings on the horizon and numerous developments unfolding, the future of U.S. monetary policy remains a topic of intense scrutiny and debate among economists, policymakers, and the public alike.