Trump slams Powell over high interest rates
- President Trump expressed his dissatisfaction with Jerome Powell's handling of interest rate policies, criticizing him for maintaining high rates.
- The U.S. is facing significant interest expenses due to its national debt, highlighting the economic implications of the Fed's policy decisions.
- Trump is contemplating replacing Powell, indicating a potential shift in monetary policy direction amidst ongoing economic challenges.
In the United States, President Donald Trump has intensified his criticism of Federal Reserve Chairman Jerome Powell due to the central bank's decision to maintain high interest rates. This criticism came to a head on June 25, 2025, during Trump's remarks at the NATO summit in The Hague, Netherlands, where he characterized Powell as having a 'low IQ' and being 'terrible' in his role. Trump's dissatisfaction stems from the belief that Powell's decisions are impacting the U.S. economy negatively, especially affecting interest expenses, which have soared to $776 billion in fiscal year 2025 due to the $36 trillion national debt. Trump highlighted that in fiscal year 2024, the federal government's interest payments were significantly higher than previous years, amounting to $1.13 trillion. The ongoing housing crisis and rising interest rates have prompted concerns from lawmakers on both sides of the political aisle about the need for economic relief. Powell has argued against rushing into rate cuts, indicating that inflation pressures need to be assessed before making any adjustments to the current policy. Ahead of Powell's testimony before the House Financial Services Committee, Trump expressed the hope that Congress would take action against what he termed 'Too Late Powell' for his inaction on rate cuts. Powell, appointed by Trump in 2017, was subsequently renominated by President Joe Biden, whose administration has kept Powell until May 2026. Trump has suggested he is considering potential replacements for Powell, stating he has narrowed it down to three or four candidates. The ex-president’s vocal discontent also hinted at fears of political interference with the Federal Reserve’s independence. Powell’s leadership style and decisions have faced scrutiny not only from Trump but also from certain members of the Federal Reserve board itself. This indicates a division of opinions regarding monetary policy and its implications for the U.S. economy, especially as geopolitical factors like Trump's tariffs on trade partners add to his economic concerns. While some Fed members advocate for immediate rate cuts to support the labor market, Powell remains cautious, stating that inflation could be triggered by tariffs.