WASHINGTON (BN24) — President Donald Trump on Friday escalated his pressure campaign on Federal Reserve Chair Jerome Powell, calling on the central bank’s board of governors to wrest control of monetary policy from Powell and lower interest rates immediately.
Posting on his Truth Social platform, Trump accused Powell of being “stubborn” for refusing to slash short-term interest rates despite signs of economic deceleration. The president’s criticism follows months of public attacks on Powell, whom Trump blames for hampering growth through tight monetary policy.
“If he doesn’t substantially lower rates, THE BOARD SHOULD ASSUME CONTROL, AND DO WHAT EVERYONE KNOWS HAS TO BE DONE!” Trump wrote, suggesting an unprecedented override of the Fed chair’s authority.
Under the Federal Reserve’s structure, monetary policy is set by the Federal Open Market Committee, which includes both the seven members of the Fed’s board of governors and the presidents of regional reserve banks. While the Fed is designed to operate independently of the White House, Trump has consistently attempted to influence its decisions.
The central bank has held its benchmark interest rate steady this year, citing the need to assess the impact of Trump’s sweeping tariffs on inflation and employment. Powell has defended the Fed’s cautious stance, arguing that more data is needed before making changes that could reverberate through the U.S. economy.
Despite his own declarations that the economy remains strong, Trump insists that aggressive rate cuts would ease borrowing costs for consumers and the government, thereby bolstering growth. He has pushed for a dramatic 3-point cut, which would slash the federal funds rate from its current average of 4.33% to around 1.33%.
Critics warn that such a sharp reduction could overheat the economy, pushing inflation well above the Fed’s 2% target. The central bank’s preferred inflation measure is currently running at 2.6% annually.
In a rare move, Fed governors Christopher Waller and Michelle Bowman — both nominated by Trump — dissented at Wednesday’s Fed meeting, advocating for moderate rate cuts. Trump seized on their dissent as support for his position, calling them “strong” and “right.”
Later Friday, the Fed announced that Governor Adriana Kugler will step down next week. Trump responded by calling for Powell to resign as well, posting, “She knew he was doing the wrong thing on Interest Rates. He should resign, also!”
Friday’s disappointing jobs report added urgency to Trump’s demands. The U.S. economy added only 73,000 jobs in July, and previous months’ figures were revised sharply downward, signaling a slowdown in hiring momentum.
While Trump has long signaled his discontent with Powell, legal options for removing the Fed chair remain limited. In a May ruling, the U.S. Supreme Court appeared to reinforce that Powell cannot be fired over policy disagreements. However, the White House has since floated the idea of dismissing Powell “for cause,” pointing to alleged cost overruns in the Fed’s ongoing $2.5 billion renovation project.
Powell’s term as chair runs until May 2026. Trump, if reelected, would then have the opportunity to nominate a successor and reshape the direction of the central bank.
