Why Trump wants Federal Reserve chairperson Jerome Powell to resign
What's the story
US President Donald Trump has demanded the resignation of Federal Reserve Chairman Jerome Powell. The demand comes amid Powell's decision to hold interest rates steady, while Trump's trade war complicates economic conditions. In a recent post on his social media platform Truth Social, Trump expressed his displeasure over Powell's performance, saying he is "always TOO LATE AND WRONG," and that his "termination cannot come fast enough!"
Tariff impact
Powell's warning on Trump's tariffs
Recently, Powell warned that the Trump administration's tariffs could result in higher prices and slower economic growth. "Tariffs are highly likely to generate at least a temporary rise in inflation," he said while addressing the Economic Club of Chicago. Powell also said Trump's import taxes were higher than most forecasters had expected, and "the inflationary effects could also be more persistent."
Economic debate
Trump disputes Powell's inflation claims
In his social media post, Trump disputed Powell's inflation claims, calling the latter's report a "complete mess." He argued oil prices were down and that the US was profiting from tariffs. However, it's worth noting that while oil prices have fallen amid fears of a global economic slowdown, grocery prices actually went up last month, according to the latest inflation report from the Labor Department.
Independence upheld
Powell's position amid political pressure
Despite the ongoing dispute, Powell has stood firm on serving the rest of his term, which runs until May next year. He maintains that Trump doesn't have the power to fire him unless there is "cause," meaning some sort of misconduct. This position is in line with current Supreme Court precedent backing such independence for Fed chairs from political pressure.