President Donald Trump has once again slammed Federal Reserve Chair Jerome Powell over high interest rates, calling for the termination of the central banker whom Trump himself appointed.
“Powell’s termination cannot come fast enough!” wrote Trump in a post on his Truth Social site on Thursday, accusing Powell of being “TOO LATE AND WRONG” on rate decisions and insisting that an interest rate cut was overdue.
Although the Fed does not set mortgage rates directly, central bank policy can influence long-term borrowing costs, including mortgages.
Trump campaigned on a vow to get mortgage rates to 3%, but so far in his second term, they have remained above 6.6%. Elevated mortgage rates continue to weigh on the housing market, stretching affordability for many buyers.
Trump, who seems to favor low interest rates no matter the economic conditions, repeatedly criticized Powell on the campaign trail, but the new broadside was his most direct attack on the Fed chair since returning to the White House.
(Win McNamee/Getty Images)
It sets up an epic showdown between the president and the Fed chair, who has sternly insisted that the law does not allow the president to fire him without cause.
Powell has also repeatedly argued that monetary policy should be guided by economic data, not political considerations, and sought to maintain the central bank’s independence from even the appearance of White House influence.
A spokesman for the Federal Reserve declined to comment when reached by Realtor.com® on Thursday afternoon.
Trump himself nominated Powell as Fed chair in 2017. Powell’s term as chair is due to expire in May 2026, although he would remain a Fed governor through February 2028.
What’s behind Trump’s criticism of Powell?
On Wednesday, Powell delivered remarks in Chicago, where he said that Trump’s new tariffs would likely result in both higher inflation and slower growth, introducing uncertainty for interest rate policy.
“Tariffs are highly likely to generate at least a temporary rise in inflation. The inflationary effects could also be more persistent,” Powell said.
The Fed, which uses interest rate adjustments to try to limit inflation while maximizing employment, plans to see how Trump’s trade policy plays out in the economy before making any changes, Powell said.
“For the time being, we are well-positioned to wait for greater clarity before considering any adjustments to our policy stance,” Powell said in remarks to the Economic Club of Chicago.
Meanwhile, the European Central Bank (ECB) cut its own policy rate early on Thursday, lowering it by a quarter-point, to 2.25%, in the seventh consecutive cut since June.
In the U.S., the Fed has held rates steady at a range of 4.25% to 4.50% since December, after cutting its policy rate a full percentage point over several months.
The contrast between the ECB’s rate cuts and the Fed’s reticence drew Trump’s ire.
“The ECB is expected to cut interest rates for the 7th time, and yet, ‘Too Late’ Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete ‘mess!'” he wrote in the Truth Social post.
Trump claimed that oil prices, groceries, and egg prices were down and said the U.S. is “getting RICH ON TARIFFS.” Inflation data from March showed lower gas prices, but rising grocery prices, including eggs.
“Too Late should have lowered Interest Rates, like the ECB, long ago, but he should certainly lower them now. Powell’s termination cannot come fast enough!” added Trump.
Can Trump fire the Fed chair?
Powell has said the president does not have the power to fire him, saying that it is “not permitted under the law.”
The Federal Reserve Act, which established the central bank in 1913, grants 14-year terms to Fed governors and specifies that they can be dismissed only for cause.
“Generally speaking, Fed independence is very widely understood and supported in Washington — in Congress, where it really matters,” Powell said Wednesday.
On Monday, Treasury Secretary Scott Bessent said the White House would not start interviewing candidates to succeed Powell as Fed chair until this fall, suggesting that Powell is expected to serve out his term.
However, Trump on Wednesday insisted to reporters that he had the power to fire Powell if he so chooses.
“If I want him out, he’ll be out of there real fast, believe me,” the president said.
If Trump did move to oust Powell early, and the Fed chair resisted, it would likely spark a legal battle that would have to be decided by the Supreme Court.
The Supreme Court is set to decide another case involving Trump’s ability to fire two Democrats from federal labor boards, but Powell has said he doesn’t believe the decision in that case will apply to the Fed.
