Mr. Trump called Federal Reserve Chairman Jerome Powell a “bonehead” for keeping interest rates too high, while revealing that Mr. Powell would soon leave his position.

"I think Mr. Powell has done very poorly, but he is also about to be replaced. In 8 months, he will leave," U.S. President Donald Trump said, according to Reuters.

Previously, Mr. Powell has repeatedly asserted that he will not resign early, and his term at the Fed extends until May 15, 2026.

For months, Mr. Trump has criticized the Fed Chairman for keeping interest rates too high and has frequently mentioned the possibility of firing him. Nevertheless, Mr. Trump has also said that firing Mr. Powell is "unlikely to happen."

Recently, the White House has ramped up its campaign to pressure Mr. Powell while also launching a review of the Fed's renovation of two buildings in Washington that the administration deems too lavish and potentially non-compliant with planning procedures. However, the Fed has vehemently denied these allegations.

On July 22 (local time), U.S. Treasury Secretary Scott Bessent also reiterated calls for a "major internal investigation" into the Fed's activities outside of monetary policy.

"The Fed is increasingly expanding its scope beyond its main mission. That's why they are spending so much money," Mr. Bessent said.

In fact, economists warn that efforts to pressure the Fed to loosen monetary policy could backfire.

Some analysts even argue that the continuous attacks from the Trump administration on Mr. Powell are eroding confidence in the Fed's ability to achieve its goals of price stability and maximizing employment.

"Investors seem to agree that the risks to the Fed's independence are increasing. If inflation continues to rise, that could make Fed officials even more hesitant to cut interest rates," said economist Jan Hatzius of Goldman Sachs.

Mr. Powell, along with other Fed officials, believes that long-term inflation expectations remain stable, and they are closely monitoring short-term indicators, especially in the context of tariffs potentially increasing price pressures as businesses pass more costs onto consumers.

On the other hand, Barclays economists argue that efforts to pressure the Fed to loosen monetary policy are inconsistent with macroeconomic conditions. In fact, this could backfire, leading to higher long-term interest rates and tighter monetary policy.

Also on July 22, Mr. Trump continued to emphasize that interest rates should be at least 3 percentage points lower than the current level.

The Federal Open Market Committee (FOMC) is likely to keep interest rates unchanged in the range of 4.25-4.5% in the meeting next week.