Trump Criticizes Powell Again: If Interest Rate Cut to 1%-2%, Could Save Trillions of US Dollars Annually

On Friday local time, US President Trump again criticized Fed Chairman Powell and further urged him to cut interest rates.

Trump published a lengthy post on Truth Social, fiercely attacking Powell and once again calling him a "blockhead" and "Mr. Too Late." Trump stated that Powell complained about cost issues, a significant portion of which were "caused by the Biden administration." He said Powell should make the "biggest and best contribution" to the US by cutting interest rates.

"If he lowers interest rates to where they should be—1% to 2%—this 'dummy' could save the US up to $1 trillion a year," Trump wrote.

"I fully understand that my strong criticism of him makes it harder for him to do what he should do, which is to lower interest rates, but I've tried all different approaches," Trump wrote. "I've been friendly, neutral, and nasty, but being friendly and neutral didn't work!"

Trump also said that currently, the US has "almost no inflation" and the economy is performing well. He claimed that if Powell is truly concerned about inflation or other risks, he should "cut interest rates now" and raise them again if circumstances change in the future.

The post also included a chart comparing US Fed interest rates with those of other countries.

Revisiting the Possibility of Firing Powell

Trump also hinted that he might reconsider whether to remove Powell from his position.

"Maybe, just maybe, I'll change my mind about firing him? But in any case, his term is ending soon!" he wrote.

Powell's term will end in May 2026. He said in November last year that if Trump asked him to resign, he would not comply, and that "the law doesn't allow" it.

Earlier this month, Trump said that his next Fed Chairman would be "announced soon."

In April this year, Trump threatened to fire Powell, which panicked investors. After fluctuations in the financial markets, he backtracked, saying he had no intention of firing Powell.

However, due to disappointment with the US Fed's handling of interest rates, Trump has intensified his criticism of Powell in recent days.

The US Fed decided on Wednesday this week to maintain the target range for the federal funds rate at 4.25% to 4.50%, the fourth consecutive decision to keep rates unchanged.

Before the Fed announced its interest rate decision, Trump criticized Powell as a "not-so-smart politician," dissatisfied with his refusal to cut interest rates. Trump also said, "Maybe I should go to the US Fed myself," and "I can do a better job than these people." On Thursday this week, he continued to post, saying that he believed the US Fed should have cut interest rates by 250 basis points in its decision the day before.

In other words, including Friday, Trump had been fiercely criticizing Powell for three consecutive days.

Former US Treasury Secretary Lawrence Summers said recently that Trump's repeated calls for the US Fed to cut interest rates may be more about shifting blame for an economic recession than attempting to directly influence the Fed's policies.