Jerome Powell, nearing the final stretch of his second term as Federal Reserve Chair, is facing intense scrutiny as the U.S. economy shows signs of strain. The weak August jobs report, just 73,000 jobs added, has fueled criticism from President Trump and his allies, who blame Powell’s decision to hold rates steady at 4.25–4.5% in July. While Powell has avoided public comment since his Jackson Hole speech on August 22, analysts believe the data strengthens the case for a September rate cut. Trump, however, has branded him “Too Late Powell,” arguing that delayed easing triggered the downturn.
At Jackson Hole, Powell struck a cautious balance, acknowledging rising risks to employment while downplaying tariffs as a long-term inflation driver. His remarks lifted markets and raised expectations of imminent rate cuts, but also drew Trump’s fury and renewed calls for his resignation. Meanwhile, the White House is openly preparing for Powell’s successor, with Kevin Hassett and Kevin Warsh emerging as frontrunners. Despite mounting political pressure, Powell has repeatedly reaffirmed the Fed’s independence, stressing that decisions remain data-driven rather than politically motivated.
The tension has deepened beyond economics, with Trump probing the Fed’s headquarters renovation and allies targeting other board members to shift the balance of power. International figures like Christine Lagarde have warned that such interference threatens global central bank independence. With inflation still above target and recession fears rising, Powell’s legacy now hinges on how he navigates the Fed’s dual mandate of price stability and maximum employment amid one of the most politically charged environments in modern Fed history.
