Trump Revives Attacks on the Fed

Donald Trump has renewed his criticism of Fed Chair Jerome Powell after the central bank kept interest rates steady, reviving concerns about political pressure on U.S. monetary policy.

Trump slams Fed as rates hold, tensions rise over policy.

Political pressure returns to monetary policy

Donald Trump has once again targeted Federal Reserve Chair Jerome Powell, criticising the central bank's decision to hold interest rates steady. In a characteristically blunt post on his Truth Social platform, the former president labelled Powell a “fool” but stopped short of renewing past threats to remove him.

The Fed, under Powell’s leadership, opted to keep rates in the 4.25% to 4.5% range, citing inflationary pressures and economic uncertainty. Powell reiterated that trade policy—especially tariffs—continues to cloud the outlook, cautioning that recent tariff hikes could stoke inflation and weaken growth.

Tariffs and tension

Mr Trump, who nominated Powell but has frequently sparred with him, insists his tariffs benefit the U.S. economy. He argues that inflation is under control and that tariff revenue is flowing in. Economists disagree. They warn that widespread levies on imports could disrupt supply chains and raise consumer prices.

Though Trump mused during his presidency about firing Powell, he now says he plans to wait until the Fed chair’s term ends in 2026. His attacks, however, revive questions about the Fed’s independence—a critical foundation of U.S. monetary policy.

Global implications

While steady rates offer relief to global markets, especially in Asia, trade uncertainty remains a drag on investor confidence. With Trump eyeing a political comeback, his unpredictable economic rhetoric may once again become a source of market volatility.