Trump Demands Aggressive Fed Rate Cuts, Threatens Powell’s Position

Former President Donald TRUMP has escalated his criticism of Federal Reserve Chair Jerome Powell, labeling him "stupid" and a "stubborn mule" for resisting aggressive interest rate cuts. Trump argues that rapid reductions—up to 2.5 percentage points—are necessary to stimulate economic growth and manage government debt, sharply contrasting with the Fed's cautious 0.5-point cut projection for 2025.

The tension highlights a deepening divide between political demands and central bank independence. Trump has threatened to replace Powell before his term expires in 2026, naming potential successors like Kevin Warsh and Scott Bessent who align with his dovish stance. Market uncertainty grows as Trump floats the unprecedented idea of appointing a "shadow" Fed chair to pressure policy decisions.

Powell maintains that premature cuts risk reigniting inflation, setting the stage for a high-stakes clash over monetary policy direction. The standoff could reverberate through financial markets, particularly for interest rate-sensitive assets.