Trump Pushes for Rate Cut, Says Powell’s ‘Termination Cannot Come Fast Enough’

The Federal Reserve is not expected to cut interest rates until June.

President Donald Trump at the White House on April 14, 2025. Madalina Vasiliu/The Epoch Times

President Donald Trump renewed his call for the Federal Reserve to cut interest rates, saying Fed Chair Jerome Powell’s “termination cannot come fast enough.”

In a Truth Social post on April 17, Trump urged the Federal Reserve to emulate the European Central Bank (ECB) and follow through on rate cuts because prices are down and “the USA is getting rich on tariffs.”

Speaking to reporters on the same day, the president reiterated his displeasure over the job Powell is doing.

“I don’t think he’s doing the job. He’s too late, always too late and slow,” Trump said. “And I’m not happy with him. I let him know it, and if I want him out, he'll be out.”

At the April policy meeting, the ECB announced another quarter-point interest-rate cut, the seventh reduction since June 2024. The institution has attempted to bolster the bloc’s growth prospects and cushion potential tariff-driven economic blows.

In April, Trump revived his critical comments against Powell.

Trump wrote in an April 4 Truth Social post that it would be “a perfect time for Fed Chairman Jerome Powell to cut interest rates.”

“He is always ‘late,’ but he could now change his image, and quickly,” Trump said. “Cut interest rates, Jerome, and stop playing politics!”

Powell said on April 16 that the new administration is engaging in “very fundamental policy changes” that could put the central bank in uncharted waters. While Powell stopped short of referencing stagflation, the Fed chief noted that the larger-than-expected sweeping tariffs could boost inflation and slow growth.

This, Powell says, would put the Fed in a difficult position with regard to the objectives of supporting the economy and tackling inflation.

“If that were to occur, we would consider how far the economy is from each goal, and the potentially different time horizons over which those respective gaps would be anticipated to close,” he stated at an event hosted by the Economic Club of Chicago.

However, since monetary policy is in a good position, Powell said he believes that he and his colleagues can wait for greater clarity before taking action.

The Fed chair’s speech and follow-up question-and-answer session triggered a selloff in the financial markets.

Investors think policymakers will keep the institution’s rate-cutting cycle on hold for the fourth consecutive meeting in May. According to the CME FedWatch Tool, the futures market anticipates the Fed will restart its easing agenda at the June meeting with a quarter-point rate cut.

Powell on the Chopping Block

Meanwhile, this is the first time since his inauguration that Trump has hinted at Powell’s termination.

Despite Trump’s criticisms of the central bank head on the campaign trail, he and other administration officials eventually agreed that he would allow Powell to complete the remainder of his term.

“As the president said on Sunday, and I’m in complete agreement with him, that Jay Powell will serve out his term,” Scott Bessent told CNBC in December 2024 when he was the nominee for secretary of the Treasury.

Federal Reserve Chair Jerome Powell speaks with Raghuram Rajan, a professor of finance at the University of Chicago's Booth School, during an Economic Club of Chicago event in Chicago on April 16, 2025. Vincent Alban/Getty Images

Powell’s term as the Fed chair ends in May 2026.

In a Bloomberg interview on April 14, Bessent noted that the White House will begin its search for Powell’s successor in the fall.

He also stated that he does not fear Trump firing Powell or challenging the central bank’s independence.

“I’ve repeatedly said the Fed has two duties, and I believe that monetary policy is a jewel box that’s got to be preserved,” Bessent said. “And then they have regulatory policies. And I think we can have more of a discussion, because the Fed is one among three bank regulators. There’s the Fed, Comptroller of the Currency, and the FDIC. So I think it’s very easy to delineated between the two.”

Financier Kevin Warsh is considered a top contender to replace Powell next year. Warsh was a heavy favorite for the position in 2018 and a candidate for Trump’s second-term Treasury secretary.

“The markets would be very comfortable with Kevin Warsh as the Fed chair. He has tremendous experience. He understands the markets, he understands economics,” top economist Mohamed El-Erian said in an April 17 interview with “Bloomberg Surveillance.”

El-Erian also said he believes that Bessent’s previous proposal of pre-announcing a new central bank chief could play out.

In 2024, Bessent floated the idea of having Trump nominate a “shadow Fed chair” and obtain Senate confirmation of Powell’s replacement.

“And based on the concept of forward guidance, no one is really going to care what Jerome Powell has to say anymore,” the seasoned Wall Street veteran billionaire told Barron’s in October.

Soon after, during an interview on Bloomberg Radio, he reiterated this plan, which reflects the practice in British politics of the opposition’s appointing a shadow cabinet to espouse policy alternatives.

“If you believe forward guidance is good, why can’t you give forward guidance on who the Fed chair is going to be?“ Bessent said. “You could do one of two things: The current Fed chair could be reappointed, so you’ve created a path there, or the new Fed chair nominee would give forward guidance beyond the current Fed chair’s sell-by date.”

Powell told reporters at the November post-meeting press conference that firing him is “not permitted under the law.”

Warsh, a distinguished visiting fellow at the Hoover Institution, has been critical of the central bank’s policy decision-making, telling CNBC’s “Squawk Box” that the Fed keeps shifting the goal posts on inflation.

“The central bank needs to be very clear about its reaction function, be clear about its goals, and not look like it’s lurching because that’s what put us in the mess we have,” Warsh said in October 2024.