Trump targets Powell again, warns US economy could slow without rate cuts

Calling Powell “Mr. Too Late” and a “major loser,” Trump posted on social media that inflation is under control and demanded swift rate reductions.
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President Donald Trump warned the US economy may slow if the Federal Reserve does not move to immediately reduce interest rates, in his latest broadside against Fed Chair Jerome Powell.

Trump said in a social media post Monday that “there is virtually No Inflation,” pointing to lower energy and food prices.

“But there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW,” Trump said, referring to Powell.

Economists widely expect Trump’s tariffs to boost inflation and slow growth, even if just temporarily. While inflation has cooled notably in recent years, it remains elevated. Powell, along with several of his colleagues, has underscored the central bank must ensure new levies don’t lead to a more persistent bout of inflation.

Trump has rattled Wall Street by repeatedly criticizing Powell and suggesting he had the ability to remove the Fed Chair before the end of his term. US equities sank on Monday as traders weighed the chances Powell gets axed, with the S&P 500 Index falling more than 3%.

Trump has privately asked his advisers about the possibility of removing Powell, while some administration officials have warned him against doing so, according to people familiar with the matter. National Economic Council Director Kevin Hassett on Friday told reporters that the president was studying the question of whether he’s able to fire Powell.

While the US economy grew at a healthy clip last year — at a 2.4% pace in the fourth quarter — economists see a tariff-induced drop in business investment and consumption driving a slowdown later this year. Meanwhile, progress on cooling inflation back to the Fed’s 2% target had stalled, but price growth slowed again in March, with the consumer price index rising 2.4% from a year earlier.

That cooling last month prompted a few Fed watchers, and Trump, to renew calls for the central bank to lower interest rates to get ahead of any slowdown in growth.

The president unleashed a tirade against Powell last week right before the European Central Bank lowered its benchmark rate by a quarter point to 2.25%. The US president repeatedly complained that the Fed was not cutting interest rates quickly enough.

But euro area policymakers are grappling with already-low growth. Inflation there is also on a much clearer path to the ECB’s 2% target, giving them the room to further lower rates. In the US, Fed officials are concerned with the slow pace of disinflation and many worry tariffs could reignite price pressures.

The president’s comments come as central bankers and economic policymakers from across the world are set to meet in Washington this week for the International Monetary Fund and World Bank spring meetings.

“I’m not happy with him. I let him know it. And oh, if I want him out, he’ll be out of there real fast, believe me,” Trump told reporters during a meeting with Italian Prime Minister Giorgia Meloni.

In a speech last week at the Economic Club of Chicago, Powell said the Fed must make sure tariffs don’t trigger an ongoing inflation problem. He added that price stability is essential to achieving a strong labor market. The Fed chief, along with his colleagues, have said officials want to wait for greater clarity on the economic impact of various government policy changes before adjusting borrowing costs.

Powell also noted the central bank’s independence “is a matter of law,” and that “we’re not removable except for cause.”

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