President Trump's repeated criticisms of Federal Reserve Chair Jerome Powell have reignited as he presses for lower interest rates. This differs from 2019 when the Fed cut rates to address economic risks from Trump's trade policies. Currently, the Fed is more cautious, fearing Trump's tariffs could stoke inflation and hinder growth. Despite Trump not planning to fire Powell, the ongoing clash signifies strain on the independence of the Fed, potentially jeopardizing its long-standing credibility as economic conditions continue to evolve.
In his first term, President Trump toyed with ousting Jerome H. Powell out of anger that the Federal Reserve chair was moving too slowly to cut interest rates.
On one side is a Fed now much more hesitant to reduce borrowing costs because of fears that the broad-based tariffs Mr. Trump has announced on virtually all U.S. trading partners will reignite inflation and slow economic growth.
This is an existentially threatening moment for the institution... We may be on the cusp of throwing away an asset that has taken decades to accumulate.
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