Just hours before the Federal Reserve was set to announce its latest decision on interest rates, former President Donald Trump launched a sharp attack on Chair Jerome Powell, calling him “stupid” and expressing doubt that the central bank would opt for a rate cut.
In ongoing criticism that stretches back years, Trump reiterated his demand that the Fed’s key borrowing rate be significantly lower, suggesting it should be reduced by “at least 2 percentage points,” and at one point even calling for a “full point” cut as “Rocket Fuel!” for the economy.
Speaking outside the White House, Trump lambasted Powell, stating, “So we have a stupid person. Frankly, you probably won’t cut today.” He drew a stark contrast with other global economies, noting, “Europe had 10 cuts, and we had none.” He speculated on Powell’s motives, suggesting he might be “a political guy” or even someone who “hates me,” concluding, “He’s not a smart person, but he’s costing the country a fortune.”
Why Trump Wants Lower Rates
Beyond simple economic preference, Trump emphasized the financial burden placed on the U.S. by high interest rates. He claimed Powell’s refusal to cut rates was costing the nation “hundreds of billions” of dollars annually in financing costs. He specifically pointed to the massive interest payments on the national debt, citing Treasury data showing hundreds of billions paid out in recent months. Trump argued that a substantial rate reduction could save the country hundreds of billions each year, freeing up significant funds.
He dismissed the Fed‘s stated concerns about inflation, saying, “If he’s worried about inflation, that’s OK. I understand that. I don’t think there’s going to be any. So far there hasn’t.” This is despite reports indicating inflation has remained above the Fed’s 2% target.
The Fed’s Position and Market Expectations
Trump’s remarks came approximately four hours before the rate-setting Federal Open Market Committee was expected to release its statement and economic projections. Market pricing at the time indicated virtually zero probability of a rate cut at that meeting, with expectations for the next potential move pointing towards September. The Fed‘s target range for the overnight borrowing rate was 4.25%-4.50%, marking what would be the fourth consecutive meeting rates were held steady.
Jerome Powell and his colleagues have consistently expressed hesitation about adjusting rates, citing ongoing economic uncertainties. These include evaluating the longer-term impact of Trump’s tariffs and questions surrounding economic momentum and inflation persistence. The Fed has maintained its commitment to making decisions based “entirely on incoming economic information,” not political pressure.
Mounting Political Pressure
Despite the Fed‘s vow of independence, pressure from the Trump administration has been intense and public. Trump characterized his attempts to influence Powell as trying both “nice” and “nasty” approaches, claiming, “Nothing works.” The push for lower rates isn’t confined to Trump alone; Vice President JD Vance echoed the sentiment, calling the Fed’s stance “monetary malpractice,” and other administration officials have also publicly advocated for reductions.
Trump, who originally nominated Powell but later expressed regret, has referred to him as “‘Too Late’ at the Fed” and a “disaster.” In a notable exchange showcasing his frustration, Trump even openly questioned whether he could legally appoint himself as the next Fed chairman, declaring, “Maybe I should go to the Fed… I do a much better job than these people.” Powell’s current term is set to expire in May 2026, and Trump has indicated his intention to name a successor well before then.
While the U.S. economy has shown signs of strength, including a low unemployment rate, central banks in other regions like Europe, Canada, and the U.K. have begun reducing their borrowing costs, partly seen as a response to global economic conditions and, in some cases, the impact of U.S. trade policies. The contrast further fuels Trump’s criticism of Powell’s steadfast approach.
