Trump Urges Federal Reserve to Cut Interest Rates, Ready to Replace Powell

Donald Trump wants Jerome Powell to step down. He calls the Federal Reserve Chairman 'stupid' and 'stubborn.' Trump believes Powell's interest rate policies are harming the U.S. economy. He states that interest rates should be cut quickly to stimulate economic growth. However, Powell has consistently indicated that the Fed needs to wait.

Trump believes that cutting interest rates will help the economy and the government's debt plans. He thinks the Fed's cautious stance is hindering the rate cuts. On the other hand, Powell insists that a sudden rate cut could trigger rising inflation. As Trump prepares for a new economic plan, the tension between the two is escalating. Interest rates have now become the frontline of this struggle.

The Federal Reserve Faces Pressure: Trump Demands Significant Rate Cuts

Trump is not asking for a small rate cut. He wants the Fed to lower interest rates by 2.5 percentage points. This is far higher than the Fed's implied goal of a 0.5 percentage point cut by the end of 2025. Trump's position is clear: if Powell does not cut rates, he wants him out.

He threatens to replace Powell before his term ends in 2026. Trump states that he is ready with 'three or four' candidates willing to cut rates. Candidates like Kevin Warsh and Scott Basset are in the mix. Trump is prepared to choose a chairman who can cooperate with his aggressive rate cut plans. The Fed currently faces tremendous political pressure to change its cautious policy stance.

If this happens, traders need to pay attention to Powell and Trump's choices. A shadow Federal Reserve chairman could disrupt the markets, weaken the dollar, and shake investor confidence. However, Trump believes this will prompt the current Fed to accelerate rate cuts. This plan could also undermine the Fed's independence.

Trump's Next Move: Searching for a New Federal Reserve Chairman

Trump has waited long enough. He wants the Federal Reserve chairman to be aligned with his fiscal plans and low-interest rate goals. He states that he will only appoint someone willing to cut rates. Trump believes high-interest rates harm the middle class and hurt the economy.

As trade agreements and tariff deadlines approach, Trump is eager to adjust monetary policy to align with his economic strategy.