Trump: 'Powell's Termination Cannot Come Fast Enough'

After Federal Reserve Chair Jerome Powell cautioned about the growth outlook during his address and held off on lowering interest rates, President Donald Trump responded saying Powell's interest rate reductions will be "too late" and his "termination cannot come fast enough."

"The ECB [European Central Bank] is expected to cut interest rates for the 7th time, and yet, 'Too Late' Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete 'mess!'" Trump wrote Thursday morning on Truth Social. "Oil prices are down, groceries (even eggs!) are down, and the USA is getting RICH ON TARIFFS. Too Late should have lowered Interest Rates, like the ECB, long ago, but he should certainly lower them now.

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"Powell's termination cannot come fast enough!"

That remains more than a year from now, as Powell's second four-year term as chair of the Federal Reserve ends in May 2026.

Trump's remarks on Powell being "too late" come after he said Wednesday the Federal Reserve can stay patient and wait to see how tariffs and other economic policies of the Trump administration play out before making any changes to interest rates.

"As that great Chicagoan Ferris Bueller once noted, 'Life moves pretty fast,'" Powell said in a speech to the Economic Club of Chicago. "For the time being, we are well positioned to wait for greater clarity" on the impact of policy changes in areas such as immigration, taxation, regulation, and tariffs, Powell said.

The sharp volatility in financial markets since Trump announced sweeping tariffs April 2, only to put most of them on hold a week later, has led to speculation about whether the Fed would soon cut its key interest rate or take other steps to calm investors. Yet the Fed is unlikely to intervene unless there is a breakdown in the market for Treasury securities or other malfunctions, economists say.

Stocks fell further after Powell's remarks. The broad S&P 500 index dropped more than 2% in afternoon trading.

In his prepared remarks, Powell reiterated the Trump administration's tariffs are "significantly larger than anticipated."

"The same is likely to be true of the economic effects, which will include higher inflation and slower growth," he said.

Powell also said that the Fed could face threats to both of the mandates it has been given by Congress: To achieve maximum employment and maintain stable prices. Should both inflation and unemployment rise, that would be a "challenging scenario," he said, because the Fed would essentially have to choose whether to keep interest rates high to fight inflation, or cut them to spur growth and hiring.

"Our tool only does one of those two things at the same time," he said in a question-and-answer session.

Powell and many Fed officials have signaled previously that they are more concerned about tariffs pushing inflation higher than their potential hit to growth. That would mean that even if the economy weakened, the Fed might keep rates elevated to combat inflation.

Powell said the inflation from tariffs will likely be temporary, but "could also be more persistent," echoing a concern expressed by a majority of the Fed's 19-member interest rate-setting committee in the minutes of their meeting last month.

Yet some splits among the Fed's interest rate-setting committee have emerged. Fed governor Christopher Waller said Monday he expects the impact of even a large increase in tariffs to be temporary, even if they are left in place for several years. At the same time, he also expects such large duties would weigh on the economy and even threaten a recession.

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Should the economy slow sharply, even if inflation remained elevated, Waller said he would support cutting interest rates "sooner, and to a greater extent than I had previously thought."

But other Fed officials, including Neel Kashkari, president of the Fed's Minneapolis branch, have said they are more focused on fighting the effects of higher tariffs on inflation, suggesting they are less likely to support rate cuts anytime soon.

For now, most recent reports suggest the economy is in solid shape. Hiring has been solid and inflation cooled in March. Yet measures of consumer and business confidence have plunged, raising concerns among economists that spending and business investment could weaken.