President Donald Trump repeated his attacks Monday against the chair of the Federal Reserve, demanding that the central bank lower its key interest rate to boost the economy.
Trump called Powell “a major loser” and said that energy and grocery prices are “substantially lower” and “there is virtually No Inflation.” Yet Trump said the economy could slow without rate cuts.
Gas prices have fallen for the past two months, in part because oil costs have dropped on fears of slower growth, but food prices jumped in January and March and overall inflation remains above the Fed’s 2% target.
Trump's comments drove the stock market and the dollar lower as investors in the U.S. and overseas grow increasingly wary about the economic standing of the U.S. On Friday, a top White House adviser said the administration is studying whether it can fire Powell, a move that would undermine the Fed's independence and likely send shock waves through global financial markets.
The stock market, which fell immediately at the opening bell Monday, tumbled further after Trump’s post, with Dow dropping by more than 1,000 points and the broad S&P 500 stock index falling nearly 3% in mid-day trading. The dollar fell to a three-year low.
The Federal Reserve was established as an independent agency and most economists think central banks that are free of political interference do a better job at keeping inflation in check. Otherwise, it would be harder for the Fed to take unpopular steps to keep prices down, such as raising interest rates.
The interest rate on 10-year Treasuries has been rising as Trump rolled out aggressive tariff policies against trading partners and continues to attack Powell and the Federal Reserve. The interest rate ticked higher again on Monday to 4.37%.
The dollar losing value is unusual when stock prices fall and Treasury yields rise because investors typically buy U.S. government bonds during market turmoil, driving down the yield. Instead, investors appear to be avoiding U.S. markets due to the perception of rising risk.
Trump also criticized Powell for being “too late” to move on interest rates. Powell and other Fed officials have long acknowledged that they waited too long to raise rates when inflation was first ignited in 2021.
But right now, Powell has underscored that the Fed faces a potentially “challenging scenario.” Trump's tariffs could worsen inflation, and the Fed would typically respond to rising prices by keeping its rate elevated, or even raising it. Yet the economy could also slow because of the duties, which the Fed would normally seek to counter with rate cuts.
"Our tool only does one of those two things at the same time,” Powell said last week.
As a result, Powell has underscored that the Fed will stay on the sidelines as it waits to see how the tariff policies play out.
Trump lashed out at Powell on Friday and said he could fire him if he wanted, though it would likely touch off a legal battle that could go to the Supreme Court. Powell has said the president lacks the authority to fire him and has made clear he won't step down until his term ends in May 2026.
Kevin Hassett, director of the White House's National Economic Council, when asked Friday whether firing Powell is an option, said that Trump “and his team will continue to study that matter.” Hassett also accused Powell of acting politically.
Trump made a similar claim in his Truth Social post, accusing the Fed chair of cutting rates last year “in order to help Sleepy Joe Biden, later Kamala, get elected.” The Fed reduced its key rate three times in late 2024 as inflation cooled and out of concern that hiring was also slowing, though it later rebounded.
On Sunday, Republican Sen. John Kennedy from Louisiana defended Powell on NBC's “Meet the Press" and added that, “I don’t think the president, any president, has the right to remove the Federal Reserve chairman."
“The Federal Reserve ought to be independent,” he said.
Also Sunday, Austan Goolsbee, president of the Federal Reserve's Chicago branch, said on CBS' “Face the Nation” that undermining the Federal Reserve's independence could lead to higher inflation, slower economic growth, and less hiring.
And William English, an economist at the Yale School of Management and a former senior Fed staffer, said Trump's attacks on the Fed aren't “going to make the American people better off over time.”
“They’ll end up in all likelihood with higher inflation, and that is not something that people want,” he said.
© Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
34 Comments
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TokyoLiving
Little Duce will sink US economy with his stupid tariff wars..
LOL
sakurasuki
So man made recession is coming now?
TheDalaiLamasBifocals
Look on the bright side.
Photographers who take stock photos of worried looking Wall Street traders are making a fortune.
quercetum
The tariffs lasted about a week then Trump got scared due to the two markets and called it off for 3 months
He then lost to China’s smartphones, computers, and electronics. Those are at 20%. Tariff Trump’s policies is not going to magically bring back industrialization.
TaiwanIsNotChina
The Trump Slump continues!
TaiwanIsNotChina
It's a really a problem that Powell isn't raising interest rates right now.
dbsaiya
Trump just found his way out of this self-inflicted pain that everyone is suffering because of this tariff policy. He's going to blame it on Powell now. I can already hear it, "I had a cure, but the lame FRB, and crooked Powell didn't listen to me, blah, blah, blah..."
lincolnman
The "Art" of cratering a once vibrant economy...
Kill it with needless trade wars that spike inflation and send his own supporters retirement investments up into smoke...
The numbers tell all - 55% disapproval of Trump's handling of the economy...Americans have seen the constant chaos, contradictions, and incompetence and have NO FAITH or TRUST in this demented old fool....
Yrral
Trump will collapse the banking system in months
Yrral
Trump feel.like he is under seize, crying help.me help me
GBR48
The RotW needs to insulate itself as much as possible from this toxic clown show. So as Trump takes down the United States and its economy, chunk by chunk, they are not dragged down with it. It's time to cut loose from the US, taxiffs and trade blocks, and move back to globalised trade and more free trade.
fallaffel
Trump found someone to blame for his economic blunders. That was fast.
Yrral
The Dow will be down to zero by June,at Trump pace,and people want to keep their retirement in it
HopeSpringsEternal
DJT has a legitimate argument as to why the FRB should be cutting rates. First, current inflation and inflation expectations, especially the widely followed 5yr, are the lowest since Trump 1.0 at just 2%, far below Japan
Second, money supply growth below trend, less than 5%
Third, due to DOGE digital audit advisory efforts, US Govt. spending is falling, hiring freeze, layoffs, etc. Over 10% of Civilian Workforce cut in less than 100 days.
Speaker Johnson committed to "at least $800 Billion" in spending cuts by Federal Govt. for fiscal year starting in Oct, DJT's first budget.
Fourth, commodity prices, especially energy dropping
Fifth, the 2year Treasury bond's interest rate has dropped substantially since DJT took office and this is the rate that most closely tracks with the FRB official Federal Funds Rate. It's clear to those who know markets the FRB is "behind the curve" on cutting rates, about 1%
Sixth, Other FRB Members, who all want to be the next Chairman now have license to speak up in favor of cuts, as this is politics after all, so Powell is being isolated and marginalized, and already has one foot out the door
US Inflation and expectations now clearly lower than Japan
wallace
Recent reports show US inflation has dropped to 2.4%, while Japan's core inflation is at 3%. Moreover, some forecasts suggest US inflation expectations might remain above the Federal Reserve's 2% target for the next few years.
Blacklabel
Powell is delinquent in doing his actual job and just focusing on his personal political agenda.
Blacklabel
Oh Lordy, I hope there are tapes!
Federal Reserve Principal Economist Aurel Hizmo describing Jerome Powell as “somebody who held the line against, like, Trump” and refused to help improve the economy under his administration.
Undercover: “Does Jerome Powell hate Trump?”
Hizmo: “Yeah, of course.”
Hizmo continued:
“He [Trump] wanted to stimulate the economy. But he [Powell] wouldn’t do it. He started raising interest rates—doing the opposite of what Trump wanted.”
“We don’t want Trump to be in the government.”
HopeSpringsEternal
Five Year "TIPS" US inflation expectations, based on institutional buyers actually investing, have priced in 2% inflation expectations in recent Treasury auctions, lowest since pre-covid, why DJT and others believe Jay Powell is "too slow" and playing "politics" etc.
Other Fed Members will jockey to curry favor with DJT and speak out for FRB cuts sooner rather than later, so Powell being rapidly marginalized and "put out to pasture', as "shadow" Chairmen emerge
HopeSpringsEternal
Jay Powell, overly worried about his legacy, not letting inflation re-ignite, and thus losing track of his mandate of balancing price stability and employment critics argue. Unlikely he hates DJT, who hired him after all.
But no question DJT's far more sophisticated about markets and rates than other Presidents, along with his aggressive nature, makes for a tough boss for Powell.
Meanwhile, the EU's Central Bank is cutting like crazy with higher inflation levels, so another value DJT point
Yrral
People in America, should open a bank account in another bank,in case their is a bank run,you will be able transfer all your funds from a collapse bank.as long as their funds left in the insolvent bank to the new bank account Google Insolvent Bank Run
BB
Trump criticizing Powell is the height of idiocy. Hey MAGA, is Powell partisan? Is that why he's not cutting rates? Trump says so, so is it true?
He raised rates 11 times during Biden's administration, so I guess that answers the question: he's a competent person doing his job and Trump is a lying fool.
Yrral
Why did the homeland security director,have 3000 dollars in her purse,unless she feared a bank collapse from Trump policy,maybe she inside information of impending collapse of the Bank
HopeSpringsEternal
US Money Center Banks announcing RECORD earnings in latest reporting, and thus US financial system in excellent shape in part due to leadership of FRB and Powell
However, DJT would like banks to lend more, as inflation very low now and money supply growth as below trend and that means "FRB needs to not fall behind the curve"
HopeSpringsEternal
Jay Powell, overly worried about his legacy, not letting inflation re-ignite, and thus losing track of his mandate of balancing price stability and employment critics argue. Unlikely he hates DJT, who hired him after all.
But no question DJT's far more sophisticated about markets and rates than other Presidents, along with his aggressive nature, makes for a tough boss for Powell.
Meanwhile, the EU's Central Bank is cutting like crazy with higher inflation levels, so another VALID DJT point
stormcrow
It looks like Trump is trying to commit Harry-carry with the whole U. S. Government.
The dying wish of an elderly man with way too much power in his hands? He’s (with his idiotic band of silly cabinet picks) far more dangerous than Joe Biden ever was.
HopeSpringsEternal
Nobody misses Biden high inflation, global proxy wars, souring crime, and open borders, DJT simply trying to clean up the mess he inherited and has strong monetary views he's expressing to Chairman Powell needed to do so.
wtfjapan
Nobody misses Biden high inflation, global proxy wars,
inflation at 2.4% when Biden left DOW at 45000. Trump in 100 days, tanked the markets,DOW at 38000. inflation is rising unemployment is rising, recession is likely. consumer confidence in the economy is at its lowest sine the 2008 GFC. oh and the price of eggs reached a record high in April.
wars well last I checked, Ukraine , Israel wars were still ongoing. remeber when Biden ended the afganistan war after Trump total failure on surrrendering to the taliban
wtfjapan
US Inflation and expectations now clearly lower than Japan
convieniety forget that Trumps trade war started April 1. Q2 inflation forcast is expected to be brutal
bass4funk
Biden and the previous Presidents didn't care that the rest of the world was ripping us off, I am so glad Trump started this tariff war. As far as unemployment, Biden didn't do a good job at all with Blacks and Hispanics.
I doubt it.
They are going down in most places, don't worry.
But we are not involved in them, so that's a good thing.
The disastrous withdrawal that was the headline on every magazine, even on that one, the left had nothing to save Biden with, and those articles are from libs.
wallace
Biden inherited a mess from Trump's first term.
https://www.factcheck.org/2021/01/what-president-biden-inherits/
Yrral
If Trump do.not flee his evil desires for tariff and do righteousness ,the banking system will collapse
bass4funk
And now the tables have turned.
Yrral
Bass4,I hope you cash in Trump 1K retirement plan
grc
I think we know who the major loser is.