Trump Still Rodeo Clowning Powell, But Keeps Fed Chair on His Bucking Bronco
Central bank maintains interest rates stability; Trump labels Powell as 'fool' in response
President Donald J. Trump, true to form, didn't pull any punches when talking about Federal Reserve Chairman Jerome Powell on Thursday. In a Tweet on his Truth Social platform, the outspoken Commander-in-Chief called Powell a "dumbass" – or something to that effect – a day after the Fed announced it would maintain its benchmark interest rate.
"'Catch up or go home,' that's what I'd tell Powell if he were a cowboy," Trump wrote. "Petrol, energy, everything's down, inflation is almost non-existent, grocery prices are cheaper than a stripper's pole at a seedy biker bar, and the U.S. is raking in all that sweet tariff cash. But no, Powell's like a mule, too stuck up his own ass to move with the times."
In treating Powell like a rodeo clown, Trump's rhetoric has been consistent since re-entering the Oval Office. Despite his public ridicule, the President has yet to make a move to canner the Fed Chairman, who's scheduled to serve until May 2026. Removing an independent central bank chief could potentially destabilize the market, a move Trump might be cautious about given his prior experience with economic turbulence.
On Wednesday, the Federal Open Market Committee (FOMC) said it would keep interest rates in the 4.25% to 4.5% range[1]. The FOMC acknowledged that economic uncertainty had increased, and while the risks of higher unemployment and higher inflation have increased, it would only use data and economic outlook to make future decisions about monetary policy.
Powell himself asserted that Trump's criticism and pressure did nothing to sway the Fed from doing its job. "We're always going to do the same thing," Powell said. "We're going to use our tools to foster maximum employment and price stability for the benefit of the American people."
Trump, however, called on the Fed to cut rates last week following the April jobs report. In the past, the President has criticized the Fed for being too slow on interest rate decisions and for not supporting his tariff-driven economic policies[1]. With the economic landscape teetering on the brink of stagflation – a mix of stagnant growth and inflation – the stakes are high for the Fed chair.
The risk of stagflation is heightened by Trump's tariff policies, which are straining economic growth while adding pressure to prices. In an already challenging situation, Powell faces the difficult task of balancing the risk of inflation with the need to support growth. But working within those constraints, Powell and the Fed must anticipate Trump's acrobatic attempts to sway the economy and economic policy.
- The economy is facing risks of stagflation, a mix of stagnant growth and inflation, due in part to President Donald J. Trump's tariff policies.
- The Federal Reserve, led by Chairman Jerome Powell, acknowledges the increased risks of higher unemployment and inflation, but will only make future decisions based on data and economic outlook.
- President Trump has pressured the Fed to reduce interest rates, citing lower energy and petrol prices, and a decrease in inflation.
- Removing an independent central bank chief like Powell could potentially destabilize the market, a move President Trump might be cautious about given his prior experience with economic turbulence.
- In the finance and general news world, political tensions between President Trump and Federal Reserve Chairman Powell continue, with Trump questioning the Fed's policy-and-legislation decisions.
- Amidst the ongoing policy debates, Chairman Powell maintains that the Fed will focus on its mandate of fostering maximum employment and price stability for the benefit of the American people.
- The business community closely monitors the interaction between the President and the Federal Reserve, as the decisions made by both parties have far-reaching implications for the U.S. economy.
