Former President Donald Trump launched a scathing attack on Federal Reserve Chairman Jerome Powell this week, accusing him of “sabotaging the economy” and being “politically motivated” after Powell publicly acknowledged the inflationary impact of tariffs on American consumers and resisted calls to lower interest rates.
Speaking at a private economic summit on Tuesday, Powell stated plainly that “tariffs, while intended to protect American industries, often have the unintended consequence of raising costs for U.S. consumers and businesses.” His comments came just days after Trump renewed his pledge to implement sweeping tariffs on Chinese, European, and Mexican goods if reelected, insisting they would boost American manufacturing.
Trump responded with fury in a Truth Social post late Wednesday night, calling Powell “a disaster” and “the worst Fed Chair in history,” adding:
“Jerome Powell doesn’t have a clue! He’s hurting our GREAT economy on purpose. Rates should be MUCH lower. Inflation is because of Biden, not tariffs! Powell is just covering for them!”
Despite mounting political pressure, Powell and other Fed officials have maintained their stance that rate cuts would be premature, citing persistent inflationary pressures—including those from proposed trade policies—as key concerns. The Fed’s independent status has long been a cornerstone of its credibility, but Trump’s renewed attacks raise concerns about whether that independence would survive a second Trump administration.
Several economists have backed Powell’s analysis, warning that broad-based tariffs could reignite inflation and complicate monetary policy. “Tariffs are essentially a tax on consumers,” said Sarah Mendel, senior analyst at the Economic Policy Institute. “Pairing tariffs with aggressive rate cuts is like slamming the gas and brakes at the same time.”
This isn’t the first time Trump has clashed with Powell. During his presidency, Trump repeatedly demanded rate cuts and even floated firing the Fed Chair—a move many legal scholars argued would have been unprecedented and potentially unconstitutional.
As the 2024 campaign intensifies, Trump’s economic rhetoric continues to center on strong protectionist policies, while also demanding looser monetary policy—an unusual and risky combination according to experts.
Meanwhile, Powell has remained publicly calm amid the criticism, saying during a press conference Thursday, “We do not make policy decisions based on political pressure. Our mandate is clear: maximum employment and price stability.”