Trump Threatens to Fire Fed Chair Powell Over Tariff Tensions
US Fed Chairman Jerome Powell, US President Donald Trump (Image credit X.com)
US FED: Trump-Powell Tension Deepens Amid Tariff War
By S Jha
New Delhi, April 17, 2025: President Donald Trump escalated his feud with Federal Reserve Chairman Jerome Powell on Thursday. Trump said in a Truth Social post that Powell’s “termination cannot come fast enough!”
Trump’s outburst followed Powell’s warnings at the Economic Club of Chicago yesterday that sweeping tariffs are likely to fuel inflation and slow economic growth, potentially leading to stagflation.
Trump’s public attack has reignited concerns about the independence of the Federal Reserve and raised questions about whether the president has the legal authority to remove the Fed chair.
In his social media post, Trump lambasted Powell as “always TOO LATE AND WRONG”, accusing him of issuing a “complete mess” of a report and failing to cut interest rates in line with the European Central Bank (ECB), which lowered rates for the seventh time on Thursday.
Trump claimed the U.S. is “getting RICH ON TARIFFS” and that falling oil, grocery, and egg prices justify immediate rate cuts. However, recent data contradicts Trump’s assertions: grocery prices rose last month, and egg prices jumped nearly six per cent between February and March due to bird flu.
Powell’s Chicago speech highlighted the risks posed by Trump’s tariffs, including a 10 per cent blanket tariff on all imports and higher duties on goods like steel and autos.
He described the tariffs as “significantly larger than anticipated” and warned of a “temporary rise in inflation” with potential for more persistent effects. Powell emphasized the Fed’s wait-and-see approach, maintaining the benchmark interest rate at 4.25–4.5 per cent to assess the economic fallout.
Trump’s call for Powell’s termination is seen by some White House allies as an attempt to scapegoat the Fed chair for economic woes caused by the administration’s trade policies. Treasury Secretary Scott Bessent has reportedly cautioned against firing Powell, warning that such a move could destabilize already volatile financial markets, with the Nasdaq down 15 per cent and the S&P 500 off 10 per cent this year.
Trump had sought to fire Powell in his first term also. The clash is the latest chapter in a contentious relationship that began during Trump’s first term when he nominated Powell as Fed chair in 2017.
Trump grew frustrated with Powell’s rate hikes in 2018, which aimed to curb inflation but sparked market sell-offs. In 2019, Trump called Powell “the enemy” and explored firing him, though he backed off after market turmoil.
Powell, reappointed by President Joe Biden in 2021, has consistently defended the Fed’s independence, stating in November 2024 that it is “not permitted under the law” for the president to fire or demote him.
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