US President Donald Trump has launched a fierce attack against Federal Reserve Chair Jerome Powell, accusing him of “playing politics” by not cutting interest rates despite rising inflation concerns. Trump claims he could evict Powell from his job if he wanted to, but experts warn that such an attempt would be destabilizing and undermine the Fed’s credibility.
Trump believes interest rates should be falling in the US as they are in Europe, where the European Central Bank has been cutting rates due to trade tensions. However, the Fed is keeping rates on hold, citing concerns about the impact of Trump’s tariffs on inflation. Powell has said he would not leave his job before its term ends next year.
The feud highlights the tension between the President and the central bank chief over monetary policy decisions. Online betting markets have taken note, with a one-in-four chance that Powell will be out as Fed chair by year end. Treasury Secretary Scott Bessent has cautioned against attempting to fire Powell, citing risks to financial markets.
Experts warn that any sudden attempt to undermine the Fed’s independence could intensify market stress and shift it towards stagflationary directions. The International Monetary Fund Managing Director Kristalina Georgieva emphasized the need for central banks like the Fed to remain agile and credible in the face of global economic uncertainty.
The incident comes as inflation risks rise due to Trump’s tariff policies, with economists polled by Reuters putting recession odds at 45%.
Source: https://www.reuters.com/world/us/trump-says-fed-chair-powells-termination-cant-come-fast-enough-2025-04-17