The White House on Tuesday defended President Trump’s ongoing attacks on Federal Reserve Chair Jerome Powell, which have fueled investor concerns in recent days.
Trump on Monday called Powell a “major loser” and suggested the Fed’s previous rate cuts were aimed at helping former President Biden. A dive in the stock market was accelerated after Trump’s comments, with the Dow Jones Industrial Average down 990 points, or 2.53 percent, at the time.
“I think the president made his position on the Fed and Powell quite clear. The president believes they have been making moves and taking action in the name of politics rather in the name of what is right for the American economy,” White House press secretary Karoline Leavitt told reporters on Tuesday.
“The president has the right to express his displeasure with the Fed and he has the right to say he believes interest rates should be lower, he believes Americans should be able to borrow money cheaper than they are right now,” she added.
Trump took to Truth Social on Monday to rail against Powell and make his case for lower interest rates.
“‘Preemptive Cuts’ in Interest Rates are being called for by many. With Energy Costs way down, food prices (including Biden’s egg disaster!) substantially lower, and most other ‘things’ trending down, there is virtually No Inflation,”
Powell has drawn Trump’s ire with his analysis that tariffs could cause economic growth to stall while inflation increases — which would likely keep the Fed from being able to lower rates.
Trump last week said he couldn’t wait for the Fed chair’s “termination” and insisted Powell would leave if he attempted to fire him. Kevin Hassett, chair of the White House National Economic Council, said Friday that the White House is exploring how to fire Powell.
Leavitt said Tuesday she spoke with Hassett, who also questioned if the Fed is acting out of politics.
“He’s called into question the Fed’s independence and whether they are actually doing things, again, out of the best interest of the economy or if they are doing it for partisan reasons,” she said.
A 90-year-old Supreme Court precedent likely protects Powell from being fired by the president for anything other than misconduct or severe neglect of office. Powell has repeatedly insisted he cannot legally be fired and would refuse to leave until the end of his term, which ends in 2026.
