Former US President Donald Trump has once again intensified his criticism of Federal Reserve Chair Jerome Powell and the central bank’s monetary policies. This time, Trump sent a handwritten letter along with a chart highlighting global interest rates, demanding that the US drastically lower its rates. The growing tension between the White House and the Federal Reserve is casting a shadow over financial markets.
Trump's Verbal Attacks on the Fed and Powell
On his social media platform, Trump harshly criticized Powell and the Fed’s Board of Governors, stating: “The Board just sits there and watches, so they are equally to blame.” He insisted that US interest rates should be reduced to 1% or even lower. In his handwritten note, Trump directly told Powell: “You have cost the USA a fortune and continue to do so.”
Trump also posted a chart comparing key interest rates from various central banks, claiming that the US rate remains among the highest globally. He argued that American citizens deserve cheaper borrowing costs. The White House Press Secretary confirmed that Trump sent the chart and the handwritten note directly to the Fed.
Why the Fed Isn't Lowering Rates
So far, the Federal Reserve has resisted Trump’s political pressure and has not lowered interest rates. The main reason behind this stance is the Fed’s focus on controlling inflation and maintaining a healthy labor market. Powell recently told the Senate that political factors do not influence the Fed’s policy decisions.
While some central banks like the European Central Bank and the Bank of Mexico have cut rates multiple times this year, the Fed has kept its rates steady. Powell has refrained from responding to Trump’s personal attacks and has maintained a strictly data-driven and non-political approach—a stance that has earned praise from many central bankers around the world.
Conclusion
As Trump continues to push for rate cuts and hints at replacing Powell, the Fed remains committed to its independence and data-based decision-making. With the upcoming election, Trump has said he will soon announce his pick for the next Fed Chair. This decision could have significant implications for financial markets, the US dollar, and inflation expectations. Whether the Fed can maintain its independence in the face of growing political pressure remains to be seen.
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