By Brendan Scanland
WASHINGTON, D.C. — Tensions are heating up between President Donald Trump and Federal Reserve Chair Jerome Powell, as the President once again demands lower interest rates—and even calls for Powell’s removal.
At the center of the clash is Powell’s resistance to cutting interest rates in response to the President’s sweeping tariffs, a key component of Trump’s trade policy. The Federal Reserve’s core goals are to promote maximum employment, maintain stable prices and manage long-term interest rates. But Powell warned this week that those goals are getting harder to meet due to the economic fallout from tariffs.
“The level of tariff increases announced so far is significantly larger than anticipated, and the same is likely to be true of the economic effects,” Powell said, expressing concern about the nation’s economic outlook.
“Unemployment is likely to go up as the economy slows in all likelihood and inflation is likely to go up,” said Powell.
Despite the Fed’s caution, Trump took to Truth Social Thursday morning to demand immediate action, blasting Powell directly. The post followed news that the European Central Bank (ECB) announced it would be dropping interest rates.
“The ECB is expected to cut interest rates for the 7th time, and yet, “Too Late” Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete “mess!” Oil prices are down, groceries (even eggs!) are down, and the USA is getting RICH ON TARIFFS. Too Late should have lowered Interest Rates, like the ECB, long ago, but he should certainly lower them now. Powell’s termination cannot come fast enough!,” said President Trump.
Economist Michael Szanto said the U.S. economy had been on track for a soft landing, but warned that tariff uncertainty is causing turbulence.
“We were in a perfect glide path. We had that soft landing. We were darn close,” Szanto said. “He [Powell] had almost accomplished that. And politically, it was very much in Trump’s interest not to mess it up. And he’s kind of messed it up.”
Szanto warned that if the administration doesn’t change course, the impacts could be severe.
“There is a very high risk that we could face a global financial crisis equaling or even exceeding the 2008 financial crisis,” said Szanto.
Powell’s term runs through May 2026. Under the Federal Reserve Act, a chair can only be dismissed for cause, such as misconduct—not for policy disagreements. Powell has maintained that his removal “is not permitted under the law.”
