Trump calls on Fed board to wrest full control of central bank from Powell
By JOSH BOAK, Associated Press
WASHINGTON (AP) — President Donald Trump urged the Federal Reserve’s board of governors on Friday to take control of the power held by Fed Chair Jerome Powell, criticizing Powell for not reducing short-term interest rates. Trump, posting on his Truth Social platform, described Powell as “stubborn” and has been openly critical of the Fed chair for several months.
The Fed is responsible for stabilizing prices and maximizing employment, and Powell has maintained the benchmark rate for overnight loans throughout the year. Powell cited the need to assess the impact of Trump’s significant tariffs on inflation before making any changes.
If Powell does not significantly lower rates, Trump suggested that “THE BOARD SHOULD ASSUME CONTROL, AND DO WHAT EVERYONE KNOWS HAS TO BE DONE!”
Two of the seven Fed governors, Christopher Waller and Michelle Bowman, dissented at the recent Fed meeting, advocating for slight rate cuts in response to the impact of tariffs on prices and the job market. Despite Trump’s claims of a booming economy, he welcomed their dissenting views.
The latest jobs report revealed a slowing economy, with only 73,000 jobs added in July and downward revisions to the June and May totals.
Trump believes rate cuts will lead to stronger growth and lower debt servicing costs. He argues that inflation is minimal, although the Fed’s preferred measure exceeds the 2% target.
While Trump has called for a significant 3 percentage point cut in the Fed’s benchmark rate, there are concerns about potential inflation if such a large cut is implemented.
The Supreme Court’s ruling in May suggested that Trump could not remove Powell for policy disagreements. The White House is exploring whether Powell could be fired for cause due to cost overruns in Fed renovation projects.
Powell’s term as chair concludes in May 2026, allowing Trump to nominate a replacement once again.
This story has been corrected to reflect that 14,000 jobs were created in June and 19,000 in May, not 19,000 in June and 14,000 in May.
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