Trump Intensifies Criticism of Fed Chair Powell, Calls for Resignation Amid Economic Concerns
President Donald Trump has launched a scathing attack on Federal Reserve Chair Jerome Powell, demanding his resignation due to the central bank’s reluctance to lower interest rates. Trump argues that such a move would stimulate consumption and boost the American economy.
Though, Powell and the Federal Reserve’s Board of Governors are reportedly concerned that a rate reduction could reignite inflationary pressures, a significant worry given the rapid price increases experienced during the COVID-19 pandemic.
In recent days, Trump’s criticism has extended to the renovation of the Federal Reserve’s Washington headquarters, a project costing $2.5 billion that has surpassed its initial budget. Trump has suggested potential fraud in the project, hinting that this could be grounds for Powell’s dismissal.
Powell addressed inquiries from a Trump governance official last week regarding the renovation.The Fed Chair explained that the extensive project includes crucial safety upgrades and the removal of hazardous materials.
Fed chair’s Term and Potential shifts in Board Dynamics Highlighted
A Treasury official in Washington has pointed out that Powell’s term as Fed Chair concludes next year. The official declined to comment on speculation about potential market collapses if Powell were to be removed.
Powell’s tenure as Fed Chair is set to end in May 2026, though he will remain on the Federal Reserve’s Board of Governors until January 2028.
The Treasury official also noted that another vacancy will arise on the Board in January, suggesting that a new appointment could alter the voting balance within the Council.
The Importance of Fed Independence for the U.S. Government
Currently, the U.S. President nominates the Fed Chair and the six other members of the Board of Governors, who are then subject to Senate confirmation.
Despite this appointment process, the Federal Reserve maintains significant operational independence in its decision-making, which profoundly influences the direction of the American economy and global financial markets.
A key factor supporting the dollar’s status as the world’s reserve currency is the Fed’s ability to set monetary policy free from political interference. This status is crucial for the U.S. government’s virtually unlimited capacity to borrow on international financial markets, even with the national debt approaching $36 trillion.