President Donald Trump’s relationship with Federal Reserve Chairman Jerome Powell has been marked by public disagreements and escalating tensions. Despite Powell’s mandate extending to may 15, 2026, as president and january 31, 2028, as a counselor, Trump’s repeated attacks have fueled speculation about Powell’s future and the Fed’s autonomy.

The situation escalated in mid-april 2025, with Trump using his social network, Truth, to express his dissatisfaction. “Powell’s cessation can’t get enough quickly,” Trump affirmed, urging the Federal Reserve to cut interest rates.

Adding fuel to the fire, during an April 2025 meeting with Italian Prime Minister Giorgia Meloni, Trump stated, “I don’t think his job is doing well. He is always late, it’s slow, and I’m not happy with him. I have told him, and if I wont him to leave, he will leave very fast, believe me.” He reiterated his stance on Truth, stating, “It is almost impractical that there is inflation, but there can be a slowdown of the economy unless Mr. too late, a great loser, lowers interest rates, now.”

Market Reaction and Economic Concerns

The financial markets reacted sharply to Trump’s remarks. On Monday, following a market closure on Friday, Wall Street experienced significant losses, treasury debt yields increased, and the dollar fell to a three-year low. These movements reflect investor anxiety over the potential erosion of the fed’s independence and the implications for economic stability.

Trump has repeatedly called for lower interest rates. “We believe it is the perfect time to lower the guys and we would like our president [del banco central] will act in advance or time, instead of the afternoon, ”said Trump, adding that it was not “the end” if Powell defied his request.

Chairman Powell has maintained that he needs “more clarity” before considering further rate cuts. He has emphasized the Fed’s dual mandate of maintaining full employment and price stability. however, Trump’s trade policies and tariffs have intricate the Fed’s task, potentially leading to both rising prices and slower job growth. Powell acknowledged that the economy “is moving away” from both objectives.

The Fed’s Independence Under Threat?

The independence of the Federal Reserve is a cornerstone of the U.S. financial system, designed to insulate monetary policy decisions from political influence. The fed’s ability to make objective decisions, based on economic data rather than political pressure, is crucial for maintaining stable prices and promoting sustainable economic growth.

The US economy, while growing, faces increased uncertainty. When Trump returned to the White House,unemployment was near historic lows and inflation was relatively controlled. Though, the International Monetary Fund (IMF) has as reduced its growth forecast for the United States from 2.7% to 1.8% and raised the probability of a recession to 37%. These revisions reflect growing concerns about the impact of trade disputes, policy uncertainty, and potential disruptions to global supply chains.

Critics argue that Trump’s actions undermine the Fed’s credibility and could lead to a loss of confidence in the U.S. economy. By publicly criticizing the Fed and suggesting that Powell should be removed, Trump risks politicizing monetary policy and creating instability in the financial markets.

Scapegoat or Legitimate Concern?

Some analysts suggest that Trump’s attacks on Powell are an attempt to deflect blame for any potential economic downturn. By portraying the Fed as an obstacle to growth, trump can position himself as a champion of the economy while shifting responsibility for any negative outcomes.

“I never did. The press rushes with things. No, I have no intention of saying goodbye. I would like it to be a little more active in its idea of ​​lowering interest rates,” Trump clarified at the White House during the swearing-in ceremony for Securities and Exchange Commission (SEC) President Paul Atkins.

Kevin Hasett, director of the National Economic Council of the white House, stated the President and his team were studying the possibility of dismissing Powell, after Trump affirmed on Truth that “Powell’s cessation can’t get enough quickly,” while asking for rate cuts.

It is true that lower interest rates can stimulate economic activity, but the effectiveness of this approach may be limited in the current environment. With inflation expectations rising and trade tensions creating uncertainty, further rate cuts could exacerbate inflationary pressures without providing a significant boost to growth.

Regardless of whether Trump ultimately dismisses Powell, his constant pressure threatens to erode the independence of the Federal Reserve and could influence the selection of future monetary policy leaders.

Powell was appointed by Trump in 2018 and renominated by President Biden in 2022.

A Counter-Argument: Presidential Oversight

While the independence of the Federal Reserve is widely valued, some argue that the President, as the elected leader of the country, has a legitimate interest in the Fed’s policies. they contend that the Fed’s decisions have a significant impact on the economy, and the President should have the right to express his views and hold the Fed accountable.

The law does not allow the president of the United States to fire Powell ahead of time, but in the authoritarian drift of his second term, he has already fired other members of independent agencies.

However, this argument raises concerns about the potential for political interference in monetary policy. If the Fed becomes too responsive to political pressure, it could lead to decisions that are not in the best long-term interests of the economy.