US Fed chief Powell is again under fire as President Trump is urging the central banker to start cutting rates immediately. Trump wants Powell to lower the interest rate, but the Fed chief chooses to wait till economic data supports a rate cut. The Federal Reserve has kept the benchmark interest rate unchanged at 4.25%-4.5% since December.
Trump recently told reporters in the Oval Office, “If I want him out, he’ll be out of there real fast, believe me. Powell’s termination cannot come fast enough!” The President reaffirmed on his social media channel, Truth Social.
The Supreme Court is hearing an appeal on Trump’s firing of senior officials at two independent agencies that oversee workplace protections for federal employees. This is viewed as a proxy battle for central bank control by the Trump administration.
This has also sparked debate on the US Federal Reserve’s structure and its ownership. According to the Fed’s website, the Federal Reserve derives its authority from Congress and is not ‘owned’ by anyone.
The Federal Reserve Banks are not a part of the federal government, but they exist because of an act of Congress. While the Board of Governors is an independent government agency, the Federal Reserve Banks are set up like private corporations. So, is the Fed private or public?
In November 2024, the Fed chief was asked if he would quit if the newly elected President Trump requested, and he responded he couldn’t since Trump is ‘not permitted under law’ to push him out.
Today, relations appear to have soured, and Powell is again facing pressure from the White House to toe the line by cutting interest rates.
Powell has resisted political meddling during his speech at the Economic Club of Chicago on Wednesday, stating that the Fed will only consider what is best for Americans when making decisions.
In 2017, President Donald Trump himself appointed Jerome Powell to lead the Federal Reserve, denying Janet Yellen a second term. Powell was renominated by President Joe Biden in 2022, and his current term as chair extends until May 2026.
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