By Nick Timiraos
President Trump lashed out at Fed Chair Jerome Powell in a post on social media Thursday that hinted at potentially dismissing the central bank leader, one day after Powell warned that the Fed could face a difficult tradeoff as tariffs raise prices and weaken the economy.
"Powell's termination cannot come fast enough!" the post read. Trump said Powell "is always TOO LATE AND WRONG" and should be cutting interest rates alongside other central banks.
Inflation in the U.S. could rise more than in other countries in the coming months because Trump has imposed a range of tariffs.
Trump has previously said he won't seek to replace Powell before his term expires in May 2026. In a Bloomberg television interview on Monday, Treasury Secretary Scott Bessent reaffirmed his support for the Fed's independence in setting interest rates, saying it is a "jewel box that has got to be preserved."
Trump's tariff announcements led to notable market volatility last week, including a rare episode in which longer-term bond yields rose while the dollar weakened.
Trump on Thursday called on the Fed to lower interest rates immediately, following an expected reduction by the European Central Bank. Powell "should have lowered Interest Rates, like the ECB, long ago, but he should certainly lower them now," Trump wrote.
On Wednesday, during a speech in Chicago, Powell said the central bank needed to make sure that any increase in prices from tariffs didn't lead to continued inflationary pressures.
Powell said he didn't believe the Fed's independence to set interest rates as it sees fit would be compromised because it is "very widely understood and supported in Washington, in Congress, where it really matters."
He added, "We're never going to be influenced by any political pressure. People can say whatever they want. That's fine. That's not a problem. But we will do what we do strictly without consideration of political or any other extraneous factors."
Updates to follow as news develops
Write to Nick Timiraos at Nick.Timiraos@wsj.com
(END) Dow Jones Newswires
April 17, 2025 07:11 ET (11:11 GMT)
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