Former President Donald Trump has intensified his long-standing campaign against federal Reserve Chair Jerome H. powell. In a striking display of direct pressure, Mr. Trump recently publicized a handwritten note sent to the head of the U.S. central bank. This personal communication marks a significant escalation in his public demands for the Fed to drastically lower interest rates.
Mr. Trump has consistently argued that the Federal Reserve’s current monetary policy is detrimental to the American economy. He claims high borrowing costs are preventing growth and costing the nation vast sums of money. This latest tactic, sharing a personal, handwritten message, underscores his frustration with Mr. Powell’s independent stance and the Fed’s decision-making process.
Trump’s Direct Demand: “Too Late” and “Lower Rate by a Lot”
The core of Mr. Trump’s recent pressure move was the sharing of a handwritten note addressed directly to Jerome Powell. The note, reportedly posted by Mr. Trump on his social media platform, Truth Social, minced no words. It began with the sharp accusation, “Jerome, you are, as usual, ‘Too Late.'”
The note went on to assert that Powell’s actions had “cost the USA a fortune” and continued this negative impact. The central demand was clear and forceful: interest rates “should lower… by a lot!” Mr. Trump justified this urgent call by claiming “Hundreds of billions of dollars” were being lost and pointed to a perceived absence of inflation.
Accompanying the note was a chart comparing central bank interest rates globally. Mr. Trump’s annotation on this chart reportedly highlighted his desired range for the U.S. rate, aiming somewhere between Japan’s notably low 0.5% and the slightly higher rates around 1.75% seen in countries like Denmark or Thailand. This visual comparison reinforced his argument that the U.S. rate, noted as 4.5% and tied for 35th lowest globally, was unacceptably high.
White House Backing and economic Arguments
The Trump campaign and its allies quickly amplified the former president’s message. White House Press Secretary Karoline Leavitt publicly supported Mr. Trump’s position during a briefing. She reportedly held up an oversized version of both the handwritten note and the comparative rate chart.
Ms. Leavitt emphasized Mr. Trump’s background as a businessman, arguing that this experience gives him unique insight into economic needs. She stated that the American people desire cheap borrowing costs and reiterated the stance that current interest rates remain “still too high.” The administration’s public defense framed the pressure as necessary action based on the former president’s economic understanding and the perceived needs of the country.
Mr. Trump himself echoed these sentiments in separate social media posts. He criticized Mr. Powell and the Federal Reserve Board of Governors, accusing them of allowing economic losses. He claimed proper action would save the U.S. “Trillions of Dollars in Interest Cost” and blamed the Board members equally for their inaction.
The Federal Reserve’s Independent Stance
Despite intense political pressure, the Federal Reserve maintains its independence in setting monetary policy. The central bank operates under a dual mandate from Congress: to achieve maximum employment and stable prices (control inflation). Interest rate decisions are based on economic data and forecasts, not political demands.
Recently, the Fed held interest rates steady at a target range, reportedly between 4.25% and 4.5%, for the fourth consecutive meeting. This decision directly contradicted Mr. Trump’s calls for immediate cuts.
While the White House pointed to recent inflation figures, such as a reported 2.4% rate in May, as justification for lower rates, Chairman Powell and the Fed have cited other economic factors. A key concern mentioned by Powell during recent testimony to the House Financial Services Committee was the potential inflationary impact of significant new tariffs implemented by Mr. Trump’s administration.
Tariffs Complicate Inflation Outlook
Chairman Powell explained that the Fed plans to carefully assess how these tariffs will affect inflation before considering any policy adjustments. He indicated that tariffs are “likely to push up prices and weigh on economic activity.” While acknowledging that overall inflation has eased recently, Powell highlighted that economic forecasters project “a meaningful increase in inflation” specifically resulting from Mr. Trump’s tariffs.
This stance reveals a complex dynamic: the Fed Chair is citing the potential economic consequences of the former president’s own trade policies as a reason not to enact the lower interest rates the former president is demanding. This underscores the intricate relationship between fiscal policy (government spending, taxes, tariffs) and monetary policy (the Fed’s control over money and credit). The Fed views its role as reacting to the economy as it is, including the effects of government actions like tariffs.
The History of Conflict and Talk of Replacement
The handwritten note and public attacks are not isolated incidents. Mr. Trump has a history of publicly criticizing Mr. Powell, whom he nominated for the role in his first term. These attacks have included personal insults and even past threats to fire the Fed Chair.
Despite saying in April he had “no intention” of firing Powell, reports indicate Mr. Trump has since begun searching for potential replacements. As many as “three or four people” are reportedly under consideration. Names like Treasury Secretary Scott Bessent have been mentioned as potential candidates who might be more aligned with Mr. Trump’s desire for lower rates. One idea reportedly floated was appointing a potential successor to a vacant Fed Governor position, and then later elevating that person to Chair.
Legal Limits on Presidential Power
Crucially, under current U.S. law, the President does not have the legal authority to unilaterally fire the Chair of the Federal Reserve. The Fed Chair serves a four-year term and Governors serve 14-year terms to ensure independence from political pressure. Jerome Powell’s term as Chair is set to end in May 2026, though his term as a member of the Fed’s Board of Governors extends until 2028.
Recent legal signals have reinforced this limitation. While the Supreme Court ruled in one case (regarding the National Labor Relations Board) that a president could fire members of certain independent boards, a majority of justices reportedly signaled in May that they believed the President could not fire the Fed Chair. They cited the Federal Reserve’s “uniquely structured, quasi-private entity” status as different from other agencies. This legal barrier means that while Mr. Trump can pressure, insult, and search for replacements, he cannot legally remove Mr. Powell from his position before his term as Chair expires, let alone from the Board of Governors.
Frequently Asked Questions
Why does Donald Trump want the Federal Reserve to lower interest rates?
Donald Trump consistently advocates for lower interest rates because he believes they stimulate economic growth. He argues that lower borrowing costs make it cheaper for businesses to invest and expand, and for consumers to buy homes and cars. He feels current rates are excessively high, comparing them unfavorably to other countries and claiming they cost the U.S. economy hundreds of billions, even trillions, of dollars in lost potential and interest payments.
What reasons does the Federal Reserve give for its current interest rate policy?
The Federal Reserve, led by Chairman Jerome Powell, sets interest rates based on its mandates to achieve maximum employment and stable prices (control inflation). While overall inflation has eased recently, the Fed has held rates steady, citing the need to ensure inflation is sustainably moving towards its 2% target. Chairman Powell specifically mentioned assessing the potential inflationary impact of newly implemented tariffs as a factor delaying potential rate cuts.
Can the President of the United States legally fire the Chairman of the Federal Reserve?
No, the U.S. President cannot legally fire the Chairman of the Federal Reserve. The Federal Reserve is structured as an independent central bank to insulate its monetary policy decisions from short-term political pressures. The Chair serves a fixed four-year term (Jerome Powell’s term as Chair ends in May 2026), and members of the Board of Governors serve even longer 14-year terms. Legal precedents and recent Supreme Court signals confirm this limitation on presidential power regarding the Fed Chair.
The Ongoing Battle Over Monetary Policy
The public confrontation between Mr. Trump and Mr. Powell highlights the tension between political desires for economic stimulus and the Federal Reserve’s commitment to independent decision-making based on broader economic data. Mr. Trump’s use of highly personal tactics, like the handwritten note, and his focus on the Fed’s policies are likely to continue influencing economic debate.
The Fed, for its part, appears committed to navigating the complex economic landscape, considering factors like inflation, employment, and the potential impacts of trade policies, while seeking to maintain its crucial independence from political influence. The future of U.S. monetary policy and the leadership of the Federal Reserve remain key points of focus as economic conditions evolve.
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