Trump ratchets up pressure on Fed chair Powell to cut rates

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Donald Trump has stepped up his attacks on Federal Reserve chair Jay Powell, accusing him of failing to cut interest rates quickly enough and claiming he would have the right to sack the US’s top central banker.

“I don’t think he’s doing the job,” Trump said of Powell on Thursday afternoon in the Oval Office. “He’s always too late, a little slow. And I’m not happy with him. I’ve let him know it and if I want him out, he’ll be out real fast, believe me.”

The president also escalated his call for the central bank to slash borrowing costs, saying “the Fed really owes it to the American people to get interest rates down”, and that “there’s a lot of political pressure for [Powell] to lower interest rates”.

The remarks at the White House came hours after Trump said on his Truth Social platform that “Powell’s termination cannot come fast enough!”

It was not clear whether Trump’s post was referring to the planned end of Powell’s term as chair, which is scheduled for May 2026, or an intention to remove him from his role sooner.

The Fed has so far kept rates on hold this year after lowering them three times in a row in 2024, including a large half-point move in September. Officials have signalled that they are unlikely to cut rates at their next meeting in May, as they await more clarity on the impact of Trump’s tariffs.

In a speech on Wednesday, the Fed chair, who was appointed by Trump in 2018, warned that the US president’s sweeping duties would lead to slower economic growth and higher inflation.

Powell said Trump’s tariffs had been “significantly larger than anticipated”, and could put US rate-setters in a “challenging scenario” in which their dual-mandate goals of price stability and maximum employment are in tension.

Trump has been a frequent critic of Powell, urging him to lower borrowing costs. Earlier this month, he wrote on Truth Social: “CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!”

But in December, he told NBC News that he would not try to oust Powell from his position before his term ended. “No, I don’t think so. I don’t see it,” Trump said.

Powell on Wednesday claimed the central bank’s independence to set interest rates as it sees fit was “a matter of law”.

He added: “We’re never going to be influenced by any political pressure. People can say whatever they want . . . but we will do what we do strictly without consideration of political or any other extraneous factors.”

European Central Bank president Christine Lagarde earlier gave her support to Powell on Thursday, telling a press conference in Frankfurt that she had “a lot of respect for my esteemed colleague and friend”.

She declined to comment further on Trump’s criticism, but said that central bank independence was a “fundamental” principle within the Eurozone and that the ECB’s “good” relationship with the Fed helped underpin global financial stability.

“We have demonstrated in the past that we could actually operate on that basis and we will continue doing so in an undeterred and unchanged manner I’m sure,” Lagarde said of the relations between the central banks.

Additional reporting by Olaf Storbeck in Frankfurt