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3mo ago

Trump Vows to ‘Force Something’ on Fed as Powell Prepares to Hold Rates

Because inflation unexpectedly eased to a 2.4% annual rate, Trump has ratcheted up pressure on the Fed by threatening to install a shadow chair.

U.S. President Donald Trump holds a chart next to U.S. Secretary of Commerce Howard Lutnick as Trump delivers remarks on tariffs in the Rose Garden at the White House in Washington, D.C., U.S., April 2, 2025. REUTERS/Carlos Barria/File Photo
U.S. President Donald Trump signs a resolution at the White House in Washington, D.C., U.S., June 12, 2025. REUTERS/Evelyn Hockstein/ File Photo

Overview

  • President Trump criticized Fed Chair Jerome Powell as a “numbskull” and demanded a full percentage point cut to the benchmark interest rate.
  • He suggested he may “force something” on the Fed and floated the idea of appointing a temporary “shadow chair” to oversee monetary policy.
  • Federal Reserve officials are widely expected to keep rates unchanged at their June 17-18 meeting given ongoing uncertainty over the economic effects of Trump’s tariffs.
  • May consumer price index data showed inflation rose 2.4% annually, slightly below forecasts but still above the Fed’s 2% target.
  • Trump has yet to rule out replacing Powell and is weighing candidates such as Treasury Secretary Scott Bessent and former Fed Governor Kevin Warsh for the role.