Trump calls for Federal Reserve to pull control from Jerome Powell

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President Donald Trump on Friday called for the Federal Reserve’s board of governors to strip Fed Chair Jerome Powell of his power. 

On his Truth Social platform, Trump once again criticized Powell for not lowering interest rates at the board of governors meeting this week, calling him “stubborn.” Trump has been verbally attacking Powell for months. 

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What did Trump say about Jerome Powell? 

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What they’re saying:

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Trump said if Powell doesn’t “substantially” lower rates, “THE BOARD SHOULD ASSUME CONTROL, AND DO WHAT EVERYONE KNOWS HAS TO BE DONE!”

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President Donald Trump delivers remarks alongside Sen. Tim Scott (R-SC) (L) and Federal Reserve Chair Jerome Powell, as they tour the Federal Reserve’s $2.5 billion headquarters renovation project on July 24, 2025 in Washington, DC. The Trump adminis –> <!–>

Trump sees the rate cuts as leading to stronger growth and lower debt servicing costs for the federal government and homebuyers. The president argues there is virtually no inflation, even though the Fed’s preferred measure is running at an annual rate of 2.6%, slightly higher than the Fed’s 2% target.

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The other side:

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Fed officials — and nearly all economists — believe a solid economy means rates should be relatively high, to prevent overheating and a burst of inflation.

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The Fed has the responsibility of stabilizing prices and maximizing employment. Powell has held its benchmark rate for overnight loans constant this year, saying that Fed officials needed to see what impact Trump’s massive tariffs had on inflation.

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By the numbers:

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Trump has called for slashing the Fed’s benchmark rate by 3 percentage points, bringing it down dramatically from its current average of 4.33%. The risk is that a rate cut that large could cause more money to come into the economy than can be absorbed, possibly causing inflation to accelerate.

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