President Donald Trump said he had no intention of firing Federal Reserve Chair Jerome Powell despite his frustration with the central bank not moving more quickly to slash interest rates.
“Never did,” Trump told reporters on Tuesday. “The press runs away with things. No, I have no intention of firing him. I would like to see him be a little more active in terms of his idea to lower interest rates.”
Trump’s National Economic Council Director Kevin Hassett on Friday told reporters that Trump was studying the question of whether he’s able to fire Powell after a series of presidential social media posts and public comments criticizing the Fed.
The president unleashed a tirade against Powell last week right before the European Central Bank lowered its benchmark rate by a quarter point to 2.25%, about half the Fed’s rate of 4.25-4.5%, saying in a post on Truth Social that “Powell’s termination cannot come fast enough!”
The U.S. president repeatedly complained that the Fed was not cutting interest rates quickly enough.
Trump reiterated that criticism on Tuesday, even as he insisted the controversy over his remarks — which rattled markets — was overblown.
“We think that it’s a perfect time to lower the rate, and would like to see our chairman be early or on time, as opposed to late,” Trump said.
Treasuries and the dollar showed greater stability on Tuesday as the White House said the administration was making progress on negotiations of trade deals aimed at reducing the sweeping tariffs he announced earlier this month. While the 10-year Treasury yield barely budged, two-year yields rose to 3.82% after lackluster demand for an auction.
Powell and his colleagues have kept interest rates unchanged this year, after lowering them by a full percentage point in the last few months of 2024, as they wait to see how the economy reacts to the administration’s policies on tariffs, tax reform, deregulation and immigration.
Most Fed officials have said policy is in a good place right now and needs to still be putting some pressure on the economy in order to continue cooling inflation, which has been above their 2% target for four years.
The U.S. economy grew at a healthy 2.8% clip last year but economists now see tariffs driving a slowdown later in 2025. While the Fed would traditionally cut interest rates to try and buoy the economy in such a situation, Powell and some of his colleagues have signaled the central bank may need to prioritize the inflation side of its dual mandate amid concerns that the levies will also reignite inflation.
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