Trump Demands Quick Removal of Fed Chair Powell Amid Interest Rate Dispute
Washington, D.C., Thursday, 17 April 2025.
President Trump intensifies pressure on Fed Chair Jerome Powell, calling for his termination due to reluctance on cutting rates, following Powell’s caution over tariffs affecting economic stability.
Escalating Tensions Over Economic Policy
President Donald Trump’s calls for the termination of Federal Reserve Chair Jerome Powell have intensified, marking another contentious chapter in a long-standing dispute over U.S. monetary policy. On April 17, 2025, Trump posted on Truth Social, emphasizing that Powell’s ‘termination cannot come fast enough,’ criticizing him for failing to cut interest rates in line with other global central banks, such as the European Central Bank (ECB), which has been reducing rates to stimulate growth [1][2].
Impact of Tariffs and Economic Outlook
The disagreement over interest rates is underscored by the broader economic context shaped by President Trump’s tariff policies. In a recent address at the Economic Club of Chicago, Powell warned that these tariffs could lead to higher inflation and slower economic growth, presenting a ‘two-pronged policy challenge’ for the Federal Reserve. This emphasis on potential stagflation—a scenario of stagnant economic growth and rising inflation—has prompted further scrutiny of the Fed’s strategic options [3][4].
Historical Tensions and Legal Constraints
The friction between Trump and Powell is not new, having persisted since Powell’s appointment in 2018. In 2019, President Trump notably referred to Powell as ‘the enemy’ following interest rate hikes. Despite the President’s calls for Powell’s ousting, it is important to note that removing a Federal Reserve Chair is ‘not permitted under the law,’ as Powell has repeatedly affirmed. The central bank’s independence is a key tenet of U.S. economic governance, and Powell has vowed to serve out his term, which ends in May 2026 [1][5].
Market Reactions and Future Projections
The ongoing conflict is influencing market dynamics, with U.S. stock futures experiencing significant volatility. On April 17, 2025, Dow futures dropped sharply after Trump’s latest remarks, reflecting investor anxiety over potential economic disruptions. Meanwhile, the S&P 500 and Nasdaq Composite have seen fluctuating fortunes as stakeholders assess the implications of continued policy disagreements. Markets are currently anticipating that the Federal Reserve may begin reducing interest rates in June 2025, with several cuts expected throughout the year to manage economic conditions [1][6].