US President Donald Trump called on the Federal Reserve to take over if Fed Chairman Jerome Powell does not cut interest rates, escalating an ongoing dispute between Trump and the central bank chief.
“Jerome Powell, a very slow, stubborn fool, must cut interest rates substantially now,” Trump wrote in a social media post on Friday, using all capital letters to express his anger. “If he continues to refuse, the Fed must take over and do what everyone knows needs to be done.”
According to Bloomberg, Trump's post came after Federal Reserve officials left interest rates unchanged on Wednesday. Powell, in his post-meeting press conference, offered no clear indication that policymakers would cut rates at the next meeting in September. Investors are now pricing in one rate cut by the end of the year.
The Federal Open Market Committee, chaired by Powell, makes interest rate decisions. The committee's voting members include seven members of the Federal Reserve Board of Governors in Washington and five presidents of regional Federal Reserve banks. The committee elects its chairman and vice chairman once a year.
Following last Wednesday's decision, Trump resumed his harsh criticism of Powell after a temporary easing of tensions, sharply criticizing the central bank chairman over interest rate setting procedures and the renovation of the Federal Reserve headquarters, which his opponents have accused Powell of mismanaging.
Trump asked lawmakers whether he should fire Powell, then told reporters he had no intention of doing so, suggesting he was willing to wait until the central bank chairman's term ends in May.
US Treasury Secretary Scott Besant said on Thursday that Trump expected to announce Powell's replacement by the end of the year.
“We are putting together a very strong list of candidates, and I anticipate we may be able to announce by the end of the year,” he told CNBC.
Bessent also pointed to dissenting views on Wednesday's decision and the possibility of two Fed seats becoming vacant early next year, suggesting the board may have a majority in favor of lowering interest rates.
Governor Adriana Kugler's position will become vacant in January, while Powell's seat on the board will be vacant if he decides to permanently leave the central bank after his term ends.
Two Federal Reserve Bank governors, Christopher Waller and Michael Bowman, voted against the resolution, the first time two members of the board have dissented since 1993.
Powell is leaning toward the view that the Fed is in an appropriate position for the time being, given the continuing uncertainty surrounding the economic impact of Trump's tariffs.
His message on Wednesday was delicately balanced: while it reduced expectations of a September rate cut, it did not completely rule out the possibility of a cut.
