On July 13 local time, on the tarmac of Andrews Joint Base in Maryland, U.S. President Trump again directed his fire at Federal Reserve Chairman Jerome Powell, vehemently calling for his resignation. Trump bluntly stated, 'Powell is very bad for the country. We should have the lowest interest rates in the world, but we don't.' This statement has once again escalated the already tense relationship between the Federal Reserve and the White House, which has been under intense scrutiny.
This is not the first time Trump has attacked Powell. Looking back, since Trump returned to the White House, he has frequently expressed dissatisfaction with the Federal Reserve's monetary policy, publicly criticizing Powell multiple times. However, such severe accusations this time have sparked strong attention from all sectors. Trump has always emphasized economic growth; in his view, low interest rates are a powerful weapon to stimulate rapid economic growth, allowing the U.S. economy to develop as fast as a rocket. He hopes to promote corporate investment and stimulate consumer spending through extremely low interest rates, thereby driving employment and overall economic prosperity.
On the Federal Reserve's side, the decision-making team led by Powell considers controlling inflation to be the top priority. In Powell's view, stabilizing prices is the cornerstone of healthy economic development. If interest rates are lowered too much, it could lead to an excess supply of money in the market, resulting in skyrocketing prices and disrupting the stable structure of the economy. For example, in the past, some countries adopted excessively loose monetary policies, ultimately triggering hyperinflation and long-term economic chaos; these cases are significant references for Powell's decision-making.
Now, the contradictions between Trump and Powell are becoming increasingly sharp, and the upcoming interest rate war may become exceptionally fierce. From the market's reaction, many investors have begun to worry. Deutsche Bank strategists have issued a stern warning that the risk of Trump pressuring Powell to resign prematurely is severely underestimated by the market. If Powell is indeed forced to resign, the dollar trade-weighted index could plummet by 3% to 4% within 24 hours, and the U.S. fixed income market would face selling pressure with yields rising sharply by 30 to 40 basis points. It is foreseeable that if this interest rate war breaks out, global financial markets may be shaken as a result.
It is worth mentioning that Trump's style has always been straightforward, and he is known for holding grudges. In the past, anyone he deemed to obstruct his policy implementation would face ongoing pressure. Powell's insistence on interest rate issues has undoubtedly touched Trump's bottom line. However, Powell is not without confidence; he has repeatedly responded that Trump, as president, does not have the legal authority to remove him from office, and he will work until the end of his term, which is May 2026. Additionally, the independence of the Federal Reserve is protected to some extent by laws and systems.
Regardless of where this power and policy game ultimately leads, the market is closely watching. Investors are anxious, and companies are hesitant to expand production and investment recklessly. In the future, will Trump continue to escalate the pressure? Can Powell hold his ground? The smoke of this interest rate war has already spread, and the subsequent developments are worth everyone's attention.#鲍威尔谈话后市场调整降息预期 
