Trump Goes Ballistic On Powell Again, Says Rates Should Have Been At 1% Or Lower, After Bessent Hints At External Fed Candidate

President Donald Trump stepped up his criticism of Jerome Powell, as the Federal Reserve Chair has so far defied political pressure to lower the Fed funds rate.

The president came out strongly against Powell and his fellow central bank board members in a post he made on Truth Social on Monday evening. 

Sharing a compilation of the prevailing benchmark rates in 44 nations, Trump said the U.S. Fed funds rate should have been below 1%. In a note handwritten over the compilation, he said, "Jerome - You are as usual 'Too Late.' You have cost the USA A FORTUNE - AND Continue TO DO SO."

He called upon the central bank chief to "LOWER THE RATE - BY A LOT."  

Delving into the ramifications of the Fed's inaction, Trump said hundreds of billions of dollars are being lost, referring to higher interest costs. He also pointed out that there was no inflation. 

In the caption that accompanied the global central bank rate compilation, Trump said, "Jerome 'Too Late' Powell, and his entire Board, should be ashamed of themselves for allowing this to happen to the United States."

"They have one of the easiest, yet most prestigious, jobs in America, and they have FAILED — And continue to do so," he said, adding that "The Board just sits there and watches, so they are equally to blame."

Some of Trump's previous Powell bashings have not gone down well with the market, although recent comments about replacing him have buoyed trader sentiment, with hopes that a rate cut could be imminent.

The Invesco QQQ Trust (QQQ) ETF and the SPDR S&P 500 ETF (SPY) have advanced 8.2% and 6.1%, respectively, at the halfway mark of the year.

At the meeting held last month, the Fed, under the leadership of Powell, decided to keep interest rates unchanged at 4.25%-4.50%. His comments at the post-meeting press conference and his semiannual monetary policy testimony reflected the central bank's preference for a "wait-and-watch" approach rather than jumping the gun.

However, a few Fed officials have recently expressed dissenting views, calling for a rate cut by no later than July.

Earlier on Monday, Treasury Secretary Scott Bessent said in an interview with Bloomberg that the Trump administration was considering using a seat on the Fed Board of Governors that is falling vacant in early 2026 to appoint a successor to Powell.

"There's a seat opening up, a 14-year seat opening up in January. So we've given thought to the idea that perhaps that person would go on to become the chair when Jay Powell leaves in May, or we could appoint the new chair in May," Bessent said.

Fed Governor Adriana Kugler's term is set to expire on Jan. 31, 2016, and Powell's term by May. 

Bessent's comments during the interview implied that, apart from the incoming governor, existing board members could also be in contention. A Reuters report stated that Governor Christopher Waller, a Trump appointee, could emerge as an internal candidate, even as the president signaled that the job would not be given to anyone who does not align with his demands for rate cuts.

The Treasury Secretary, while stating that he was happy with his current job, did not rule himself out as a potential replacement for Powell. "I will do what the president wants," he said in the Bloomberg interview.

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