Trump calls Fed's Powell a 'numbskull', says he will be out in 8 months

US President Donald Trump has consistently criticised Powell for failing to lower interest rates and has often raised the prospect of removing him, while acknowledging that such a move is 'unlikely'

US Federal Reserve Chair Jerome Powell is a “numbskull” who has kept interest rates excessively high, President Donald Trump said at a news conference on Tuesday. Trump remarked that Powell would no longer be in the role within eight months.

 

“I think he’s done a bad job, but he’s going to be out pretty soon anyway. In eight months, he’ll be out,” Trump said during a meeting at the White House with Philippine President Ferdinand Marcos Jr. Although Powell’s term as Fed Chair is due to run until May 15, and he has consistently stated that he does not intend to leave early, Trump’s comment implied a departure by mid-March. The reason why Trump picked this specific timeline was not clear.

 

 

‘He keeps the rates too high’: Donald Trump

 

Trump has repeatedly criticised Powell for not lowering interest rates and has frequently suggested the possibility of removing him, though he has also conceded that dismissal is “unlikely”. “Our economy is so strong now, blowing through everything. We’re setting records,” Trump said on Tuesday. “But you know what? People aren’t able to buy a house because this guy is a numbskull. He keeps the rates too high, and is probably doing it for political reasons.”

 

Economists warn against political pressure

 

Economists have warned that political pressure on the Federal Reserve to ease monetary policy could backfire. They cite examples of hyperinflation in nations such as Argentina and Zimbabwe, which resulted from political interference in central banking decisions. Some analysts believe that continued attacks by the Trump administration are damaging confidence in the Fed’s ability to fulfil its dual mandate of price stability and full employment.

 

Trump administration seeks ‘big internal investigation’

 

Recently, the White House has escalated its scrutiny of the Fed by initiating a review into its renovation of two buildings in Washington. Officials claim the refurbishments are excessively extravagant and may have bypassed proper planning procedures—allegations the Fed strongly denies. At the same event, Treasury Secretary Scott Bessent reiterated his demand for a “big internal investigation” into the Fed’s non-monetary operations.

 

Goldman Sachs flags rising concerns over Fed independence

 

“Market participants seem to agree that the risk to Fed independence is rising,” wrote Goldman Sachs economist Jan Hatzius on Monday. He highlighted a rise in long-term inflation expectations, specifically the five-year five-year forward inflation swaps—a financial instrument tracking inflation anticipated over a five-year period starting five years in the future. “A further increase could make Fed officials more reluctant to cut,” Hatzius added.

 

Trump calls for rate cuts despite market caution

 

On Tuesday, Trump reiterated his stance that the policy rate should be 3 percentage points lower than its current level. The Fed’s policy-setting body, the Federal Open Market Committee, is broadly expected to maintain the existing target range of 4.25 to 4.5 per cent in its meeting next week, as officials assess the impacts of inflation and employment trends amid ongoing trade tariffs.

 

Mortgage rates rose last year despite the Federal Reserve reducing its policy rates by a total of 1 percentage point, as they followed the movement of US Treasury yields, which climbed due to economic resilience and concerns over Trump’s proposed policies.

 

(With inputs from agencies)