Political and market pressure is mounting on the Federal Reserve after the agency held interest rates steady for the fifth time. President Trump once again took to social media to criticize Fed Chairman Jerome Powell, calling for immediate action to cut interest rates.

Trump Again Criticizes Powell, Calls for the Board to Take Control

In a recent post on Truth Social, Trump called Powell a "stubborn fool" and accused him of acting too slowly in responding to economic challenges. Trump has long criticized Powell, whom he appointed in 2017, especially regarding what he sees as overly cautious monetary policy.

"Jerome 'Too Late' Powell must significantly lower interest rates, RIGHT NOW," Trump wrote. He added, "If he continues to refuse, the Board should take control and do what everyone knows needs to be done!"

This is not the first time Trump has attacked Powell. He has been frustrated for years, believing the Fed is acting too slowly and harming the economy by keeping interest rates too high. On Thursday, he criticized Powell as "too stupid" and "too political" after rates were held steady.

A Test for the Fed

But can President Trump fire Powell? No, but he still has some influence. According to Grok, an AI chatbot from xAI, the Fed Board of Governors can override Chairman Powell's interest rate decisions by majority vote in FOMC meetings.

Legally, the president cannot directly fire the Fed Chairman, but by appointing new governors with Senate approval, the White House can shift the balance over time. Although Trump cannot dismiss Powell, he can restructure the Fed's leadership and apply public pressure, which seems to be increasing.

His suggestion that the Board should take control has challenged the traditional independence of the central bank. This is unlikely to lead to immediate action but could still disrupt the markets.

Increasing Calls for Fed to Cut Interest Rates Soon

Anthony Pompliano called the Fed's latest move "a big mistake." In the context of a booming economy, with Q2 GDP growing 3%, high interest rates are stifling further progress.

He argues that lower interest rates are fundamentally good for all Americans and predicts we may see rates cut before the end of the year.

Deputy Secretary of the Treasury Michael Faulkender also argued that there is no valid reason to maintain high interest rates, as even Fed officials acknowledge that cuts can be made.

The cryptocurrency market has recently lost momentum as Bitcoin fell 3% to just under $115,000 and Ethereum dropped nearly 6%. Market sentiment weakened after new U.S. tariffs boosted the dollar and raised inflation concerns.

With inflation at 2.8%, hopes for the Fed to cut interest rates in September are gradually fading, which may not be good for cryptocurrencies, which tend to perform better with lower rates.