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The conflict between President Trump and Federal Reserve Chair Jerome Powell continues, as the Fed maintains steady interest rates despite political pressure.
President Donald Trump’s long-standing tussle with Federal Reserve Chair Jerome Powell has once again burst into the spotlight, after the central bank's leaders gave a clear signal that they would not change policies just because of political pressure.
The Federal Reserve held interest rates steady at 3.5%-3.75% target range on Wednesday, even though President Donald Trump has put the central bank and its chairman, Jerome Powell, under intense pressure to lower borrowing costs.
By refusing to cut rates, the central bank’s leaders have asserted their independence from the White House, a principle that has long been upheld by central bank chiefs across the world and collectively defended.
The standoff is not just a war of words. It has escalated to the point where Powell and the Fed are facing a criminal investigation launched by Trump’s close ally Jeanine Pirro, the US attorney for the District of Columbia, NBC News reported.
Why does Trump want him out?
The criminal investigation against Jerome Powell is related to his testimony before Congress in June last year, about the costs of a Federal Reserve building renovation — an inquiry that Powell has publicly denounced as politically motivated pressure over the Fed's refusal to cut interest rates.
US President Donald Trump has taken multiple jabs at Powell in the past, but in his latest remarks, he sharply criticised Powell for refusing to cut interest rates, accusing him of damaging the country's economy and even undermining national security.
These pointed remarks are not something new, as the US president has also previously argued that the central bank’s cautious stance is hurting businesses, markets and his broader economic agenda.
The president linked his push for rate cuts to his administration’s tariff policies, claiming they have strengthened the US economy and boosted government revenues.
Meanwhile, Powell has defended the Fed's independence, insisting that monetary policy must be guided by inflation risks and economic data, not political pressure from the White House.
When does Powell's term end?
Powell's term as Federal Reserve chairman will end in May, but he is not obligated to leave the Washington-based Board of Governors until 2028, news agency Reuters reported.
The search for a new Fed chair is nearing its end, with President Trump expected to announce a successor soon. Whoever Trump ends up choosing, the nominee's name would then go to the Senate for confirmation.
The frontrunners for the high-stakes role include Kevin Hassett (White House National Economic Director), Kevin Warsh (former Fed official), Christopher Waller (Fed Governor), and Rick Rieder (BlackRock executive).
English (US) ·