President Donald Trump intensified his criticism of Federal Reserve Chair Jerome Powell on Thursday, calling for his “termination” due to what he views as delayed interest rate cuts. This attack followed Powell’s warning about the economic risks posed by Trump’s tariffs, which he said represent significant and unprecedented policy shifts. In a social media post early Thursday, Trump accused the Fed of trailing behind the European Central Bank, which had just announced another interest rate cut—its seventh in a year. Trump called Powell “always TOO LATE AND WRONG” and labeled the Fed’s latest report a “complete mess,” adding, “Powell’s termination cannot come fast enough!”
Powell had cautioned that the administration’s sweeping trade policies could push the U.S. into stagflation—a combination of stagnation and inflation not seen in decades. His remarks aligned with those of other Fed officials who believe tariffs may increase inflation and unemployment. Prominent investors like Ray Dalio have echoed those concerns, warning that the U.S. economy may already be slipping into recession.
Appointed by Trump in 2018 and reappointed by President Biden in 2021, Powell’s current term ends in May 2026. Despite the appointment, Trump has frequently criticized Powell since 2018, accusing him of poor decision-making, especially regarding interest rate hikes. In 2019, Trump called him “the enemy,” and in 2020, after the pandemic crash, said he had the right to remove Powell. While Trump later praised Powell for cutting rates to zero, he has since stated he won’t reappoint him for a third term.
Powell has insisted he will serve his full term, emphasizing that the law does not allow for a Fed chair to be removed by the president. However, the legal protections surrounding the Fed’s independence may not be ironclad. Trump has already removed Democratic members from other independent agencies, including the Federal Trade Commission and the National Labor Relations Board, citing conflicts with his administration’s priorities.
The Supreme Court is expected to revisit Humphrey’s Executor v. United States, a 1935 case that limits presidential power in removing agency heads. The ruling stemmed from President Franklin Roosevelt’s firing of FTC commissioner William Humphrey over policy disagreements. The Court ruled that the president doesn’t have unlimited removal power—a precedent the Trump administration now seeks to overturn. As legal battles unfold over recent firings, the future of independent U.S. institutions like the Federal Reserve could be shaped by the Court’s upcoming decision.
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