US President Donald Trump said he won’t fire Federal Reserve Chair Jerome Powell, despite wanting faster interest rate cuts.
“Never did,” Trump told reporters Tuesday. “The press runs away with things. No, I have no intention of firing him. I would like to see him be a little more active in terms of his idea to lower interest rates.”
This comes after Trump’s economic advisor, Kevin Hassett, told reporters that Trump was checking if he could legally fire Powell. Trump had posted angry messages about Powell on social media.
Last week, Trump blasted Powell right before Europe’s central bank cut its rate to 2.25% – much lower than the US rate of 4.25-4.5%. On Truth Social, Trump wrote, “Powell’s termination cannot come fast enough!”
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Trump has often complained that the Fed is too slow to cut rates. On Tuesday, he stuck to this view while claiming that market worries about his comments were overblown.
“We think that it’s a perfect time to lower the rate, and would like to see our chairman be early or on time, as opposed to late,” Trump said.
Financial markets were calmer on Tuesday. The White House said they’re making progress on trade talks to reduce Trump’s recently announced tariffs. Bond yields showed mixed results, with two-year yields rising to 3.82% after poor auction demand.
The Fed has kept rates unchanged this year after cutting them by 1% in late 2024. They’re watching how the economy reacts to Trump’s policies on tariffs, taxes, deregulation, and immigration.
Most Fed officials think current rates are appropriate and need to keep some pressure on the economy to control inflation, which has been above their 2% target for four years.
The US economy grew 2.8% last year, but economists expect the new tariffs will slow growth later in 2025. While the Fed would normally cut rates during a slowdown, Powell has hinted they might focus on fighting inflation instead, worried that tariffs could push prices higher again.
