Donald Trump has reignited his war of words with the U.S. Federal Reserve, this time going after Chair Jerome Powell in highly personal terms. During a public appearance at the White House, Trump labeled Powell a “numbskull” and demanded an immediate 2% interest rate cut, arguing it could save the U.S. economy $600 billion annually.
“We’re going to spend $600 billion a year—because of one numbskull that says, ‘I don’t see enough reason to cut rates,’” Trump said during a bill signing ceremony.
The comments came after new data from the Labor Department revealed producer prices rose more slowly than expected in May, signaling easing inflation. For Trump, that’s reason enough to push the Fed toward easing.
“If inflation’s up, raise rates. But it’s down. And I may have to force something,” he warned—though without specifying what “force” meant.
Coordinated Pressure Campaign from Within
Trump’s remarks weren’t an isolated shot—they were part of a coordinated push. Within just 48 hours:
Commerce Secretary Howard Lutnick appeared on Fox News, stating it’s “unbelievable how much we would save if Powell did his job.”
Vice President JD Vance called the Fed’s current stance “monetary malpractice” in a direct online statement.
The message was clear: Trump’s inner circle is united in its demand for immediate monetary easing.
Markets Shrug, but September in Focus
Markets didn’t react much to the comments—a rate cut at the upcoming Fed meeting is still seen as unlikely. But September is now firmly on the radar:
According to CME Group data, odds of a rate cut in September jumped from 69% to 76% following Trump’s remarks.
Trump, known for assigning branding nicknames to political figures, has now started referring to Powell as “Too Late”, a jab at what he sees as slow and out-of-touch policy decisions.
No Dismissal—For Now
Interestingly, Trump confirmed he doesn’t plan to fire Powell before his term ends in May 2026—yet hinted he’s tempted:
“I’m not going to fire him,” he said. “But I don’t know why it would be so bad.”
Despite this, legal experts and past court rulings suggest the Fed chair enjoys strong job security, making it nearly impossible for a president to remove him unilaterally.
Why This Matters for Markets (and Crypto)
This public feud could shape U.S. monetary policy in the months ahead. While Fed independence is a core principle of the U.S. economic system, political pressure—especially during an election year—can influence market expectations and investor behavior.
For crypto investors and global markets alike, interest rate decisions from the Fed are a major driver of liquidity, risk appetite, and asset flows. A 2% rate cut would be monumental—and bullish—for risk assets.
But for now, Powell remains in charge, unmoved by the noise—at least publicly.
