Federal Reserve Chair inflation-expected/” title=”The "Dow Jones" rises more than 500 points due to the "low …" expected”>Jerome Powell Faces Pressure from President Trump Amid Economic Slowdown Concerns
President Donald Trump has publicly urged the Federal Reserve to lower interest rates, citing a recent jobs report that indicated a decelerating economy.The July jobs report showed only 73,000 jobs were added,with downward revisions for June and May bringing those figures to 14,000 and 19,000 respectively. Trump believes that rate cuts would stimulate stronger economic growth and reduce borrowing costs for both the government and consumers. he has also asserted that inflation is negligible, despite the Federal Reserve’s preferred inflation measure standing at an annual rate of 2.6%, which is above the Fed’s 2% target.
trump has advocated for a significant reduction in the Fed’s benchmark interest rate, proposing a cut of 3 percentage points from its current average of 4.33%. Such a ample decrease carries the risk of injecting more money into the economy than it can absorb, potentially leading to an acceleration of inflation.
The legal standing of Trump’s ability to remove Powell from his position was addressed in a Supreme Court ruling in May,which suggested that policy disagreements alone would not be sufficient grounds for removal. Following this, the White house reportedly explored whether Powell could be dismissed for cause, investigating cost overruns associated with the Federal Reserve’s $2.5 billion renovation projects.
powell’s tenure as Federal Reserve Chair is scheduled to conclude in May 2026. At that point, Trump would have the chance to nominate his own choice for the position, subject to Senate confirmation.