President Donald Trump has once again called for Federal Reserve Chair Jerome Powell to resign, marking another chapter in his ongoing criticism of the central bank. This latest demand came on Wednesday, shortly after Bill Pulte, the director of the Federal Housing Finance Agency, suggested that Congress investigate Powell for alleged political bias and misleading statements regarding renovations at the Federal Reserve headquarters in Washington, D.C.
In a post on Truth Social, Trump responded to Pulte’s remarks by insisting that Powell should "resign immediately." He has previously mocked Powell with the nickname "Too Late," criticizing him for not cutting interest rates quickly enough. Trump has been vocal about his desire for the Federal Reserve to lower the benchmark interest rate, which currently sits between 4.25 percent and 4.5 percent. He argues that the Fed’s cautious approach is stifling economic growth and that inflation concerns are overstated.
Lowering interest rates can make borrowing cheaper for both businesses and consumers, which typically boosts economic activity. However, such cuts can also lead to higher inflation, a concern for central banks. Trump’s tariffs on imports are expected to push prices up, complicating the Fed’s decision-making.
During a recent panel at the European Central Bank Forum in Portugal, Powell explained that the Fed is taking a cautious stance on rate cuts to assess the impact of Trump’s tariffs, many of which are pending a July 9 deadline. He noted that inflation forecasts have risen significantly due to these tariffs and emphasized the need for a careful approach.
Trump’s criticisms of Powell are not new. Since taking office in January, he has repeatedly suggested that Powell should step down or be removed. Just last week, he mentioned that he would "love" for Powell to resign if that was his choice. In April, he even stated that Powell’s removal "cannot come fast enough," although he later backed off after seeing negative reactions in the stock market.
It’s important to note that under U.S. law, the president can only fire the Fed chair "for cause," which generally means for specific misconduct rather than for policy disagreements. A recent Supreme Court ruling reinforced the idea that the Federal Reserve operates with a level of independence from the executive branch.
On Tuesday, Trump hinted that he has a few candidates in mind to replace Powell but did not provide any details on who they might be. As the debate over monetary policy continues, the relationship between the White House and the Federal Reserve remains a topic of significant interest and concern.