Trump criticises Fed rates, again considers sacking Powell

WASHINGTON: US President Donald Trump has once again criticised the Federal Reserve for keeping interest rates high. 

In a fresh outburst, he suggested that he might rethink removing Fed Chair Jerome Powell — a move he has threatened several times before but never carried out.

"I don’t know why the Board doesn’t override (Powell)," Trump wrote in a lengthy post on Truth Social criticising Fed policy. "Maybe, just maybe, I’ll have to change my mind about firing him? But regardless, his Term ends shortly."

Trump added: "I fully understand that my strong criticism of him makes it more difficult for him to do what he should be doing, lowering Rates, but I’ve tried it all different ways."

Fed chairs have long been viewed as insulated from presidential dismissal unless for malfeasance or misconduct, but Trump has repeatedly threatened to test that legal boundary by threatening to sack Powell.

Trump almost as often reverses course on those threats. "I’m not going to fire him," he said at the White House on June 12.

The Fed held rates steady on Wednesday in the 4.25%–4.50% range and forecast slower growth along with higher unemployment and inflation by year’s end.

Fed Governor Chris Waller, who has been floated as a possible Trump pick to succeed Powell, said on Friday that with inflation falling and the labour market showing signs of softening, rate cuts should be considered as early as July.

But even Waller joined Wednesday’s unanimous Fed decision to keep rates unchanged, showing no willingness among Powell’s six fellow Board members or the five voting regional Fed bank presidents to "override" him. Fed decisions are usually based on consensus, and more than one or two dissents are uncommon.

Elected partly on voters’ belief that he could rein in high inflation, the Republican US president has imposed tariff hikes during his time in office. Powell, echoing the academic consensus, has said some of those tariffs would result in higher consumer prices.

Powell’s term ends in May 2026, and Trump is expected to nominate a successor in the coming months.

A Supreme Court ruling in May eased concerns that Trump could sack Powell, as the justices described the Fed as "a uniquely structured, quasi-private entity."