US President Donald Trump has taken a strong stance against the Federal Reserve, calling on the board to “assume control” and lower interest rates after the central bank held rates steady this week. The move comes as Biden-appointed Fed Governor Adriana Kugler announced her resignation, giving Trump an opportunity to expand his influence over the Fed.
Trump’s attack on the Fed and Chairman Jerome Powell is not unexpected, but experts say his understanding of the interest rate decision process is misguided. “A handful of dissents shows the committee can grumble, but a successful revolt would need at least seven ‘nays’ against Powell,” said Michael Ashley Schulman, chief investment officer of Running Point Capital Advisors.
The Fed’s decision to keep rates unchanged between 4.25% and 4.5% was met with dissent from two Trump-appointed governors, Michelle Bowman and Christopher Waller. However, this does not constitute a full-blown revolt, according to Schulman.
It remains to be seen how Powell will respond to Trump’s pressure. The Fed chairman has indicated he will serve out the remainder of his term as chairman until it expires in May, but some experts believe he can remain on the board of governors after that due to an independent term.
The Fed’s stance on interest rates is being closely watched, particularly given the economic uncertainty caused by trade tensions and other factors. The latest labor market data showed a slowdown in job growth, which may impact Trump’s expectations for rate cuts.
Powell has taken a hawkish tone, saying the economy is not performing as though restrictive policy is holding it back inappropriately. This stance may put pressure on investors who had hoped for a rate cut at the next Fed meeting in September.
Source: https://fortune.com/2025/08/02/federal-reserve-vacancy-interest-rates-donald-trump-jerome-powell