Trump Signals Support for Powell Amid Interest Rate Debate

In a recent interview, Republican presidential candidate Donald Trump expressed his intention to allow Federal Reserve Chair Jerome Powell to complete his term if he wins the upcoming November election. Trump stated, "I would let him serve it out, especially if I thought he was doing the right thing," highlighting his willingness to support Powell, whose term ends in May 2026. However, Trump cautioned against the Fed cutting interest rates before the election, suggesting that such a move could benefit the economy and President Biden. Wall Street analysts anticipate that the Federal Reserve will implement two interest rate cuts by the end of the year, with the first expected in September. Trump criticized the Fed's potential actions, asserting, "It's something that they know they shouldn't be doing." Despite nominating Powell in 2017, Trump has previously been vocal in his criticism of the Fed chair, labeling him a "bonehead" for raising interest rates and threatening to dismiss him. In a February interview, Trump indicated he would not reappoint Powell for a third term, citing concerns about Powell's political motivations and suggesting that lowering interest rates could aid the Democrats. The Fed has raised interest rates significantly over the past two years to combat inflation, reaching levels not seen in over two decades. As inflation shows signs of stabilizing, policymakers are now faced with the challenge of determining the right time to ease monetary policy without jeopardizing economic recovery.