Fed chair won’t take orders from Trump—and that’s got Trump fuming
President Donald Trump erupted at Federal Reserve Chair Jerome Powell—again—after he correctly warned that Trump’s chaotic tariffs would fuel inflation and drag down the economy.
Speaking Wednesday at the Economic Club of Chicago, Powell said that the administration’s trade war is “highly likely” to drive up prices, with the potential for more lasting damage. Markets tanked in real-time as he spoke.
“Tariffs are highly likely to generate at least a temporary rise in inflation. The inflationary effects could also be more persistent. The level of the tariff increases announced so far is significantly larger than anticipated. The same is likely to be true of the economic effects, which will include higher inflation and slower growth,” Powell said.
He added that the Fed could afford to be patient on interest rates but warned that Trump’s tariffs were making the path forward far more complicated. The trade war, Powell warned, could force the Fed to choose between fighting inflation and preserving a strong labor market.
Powell, who was first appointed by Trump in 2017 and reappointed by President Joe Biden in 2022, also made clear that the Fed wouldn’t let short-term inflation become a long-term crisis.
True to form, Trump responded with a furious, unhinged Truth Social post.
“Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete ‘mess!’” Trump fumed, demanding rate cuts and declaring that “Powell’s termination cannot come fast enough!”
He also griped that the European Central Bank was about to lower interest rates for the seventh time, while the Fed was holding off due to the mess Trump created. Unlike Europe, the United States is busy slapping triple-digit tariffs on major trade partners, stoking more inflation in the process.
Then, of course, came the lies.
Trump falsely claimed that egg prices are down and that the United States is getting “RICH ON TARIFFS.” Which is true, at least for Trump’s wealthy Republican pals.
It’s unclear whether Trump was calling for Powell’s immediate ouster or just counting down to the end of his term in May 2026. Either way, it likely wouldn’t change much, and Powell has made clear he’s not going anywhere. The Fed doesn’t take orders from the president; it was built to operate independently, precisely to resist political pressure and retaliation.
“Generally speaking, Fed independence is very widely understood and supported in Washington—in Congress, where it really matters. People can say whatever they want. That’s fine. That’s not a problem, but we will do what we do strictly without consideration of political or any other extraneous factors,” Powell said.
Of course, this isn’t the first time that Trump has turned Powell into a scapegoat. In 2019, he raged when Powell didn’t slash rates fast enough. And just last month, Trump declared it the “PERFECT time” to cut interest rates again, despite the inflation his own policies are driving.
Legally, Trump can’t fire Powell over a policy disagreement, and any attempt would almost certainly fail in court. But that’s never stopped him before, and stoking market chaos might be just the distraction he’s looking for.
Still, Powell’s message couldn’t be clearer: He’s not here to serve Trump’s political whims. And he’s certainly not going anywhere.