President Trump claimed he would do a “much better job” running the Federal Reserve than “stupid” Jerome Powell – as policymakers once again failed to cut interest rates on Wednesday.
Hours before the Federal Open Market Committee announced its expected decision to leave rates alone for the fourth straight month, Trump mused “maybe I should go to the Fed” when Powell’s term expires next year.
“Am I allowed to appoint myself at the Fed? I’d do a much better job than these people,” he said at the White House.
Trump argued that the Fed’s key borrowing rate should be at least 2 percentage points lower and slammed Powell as “a political guy who’s not a smart person, but he’s costing the country a fortune.”
In response, the Fed Chair offered a rare reply to Trump’s verbal assault during a news conference after the FOMC kept rates in the target range between 4.25% and 4.5%.
“The economy has been resilient and part of that is our stance,” Powell said. “That is what matters to us, pretty much that’s all that matters to us.”
While policymakers still anticipate cutting rates by half a percentage point this year, as they projected in March and December, they slightly slowed the pace from there to a single quarter-percentage-point cut in each of 2026 and 2027 in a protracted fight to return inflation to the central bank’s 2% target.
The Fed kept its forecast for two cuts later this year, but said uncertainty has “diminished” since April as Trump cut back some tariff rates and paused others.
In new economic projections, policymakers sketched a picture of modest stagflation, with economic growth slowing to 1.4% this year and unemployment rising to 4.5%.
Officials hiked their forecasts for inflation, however, with the “core measure” – which excludes volatile food and energy prices – soaring to 3.1% this year, well above the current level. Policymakers in March had expected core inflation would peak at 2.8%.
Major stock indexes climbed immediately after the report but soon walked back those gains, with the Dow falling 44 points — after being up more than 200 earlier in the day.
“Effectively they are sitting on their hands, waiting to see if tariffs increase inflation or the jobs market starts to falter, and whichever part of their dual mandate is impacted first will likely guide whichever direction they take,” Chris Zaccarelli, chief investment officer at Northlight Asset Management, said in a note.
Trump, who appointed Powell in his first term, has long criticized the Fed chair and sparked market concern earlier this year when he suggested his termination couldn’t come fast enough.
Trump has since walked back from that rhetoric, saying he would not fire Powell before his term as chair ends, but he has not held back on his broader criticism and has made clear that he will not ask Powell to stay on as the central bank’s leader.
“What I’m going to do is, you know, he gets out in about nine months, he has to, he gets fortunately terminated,” Trump said at the White House before the Fed announcement.
“I would have never reappointed him, [President Joe] Biden reappointed him. I don’t know why that is, but I guess maybe he was a Democrat… he’s done a poor job.”
While policymakers stuck to their forecast of cutting rates by half a percentage point this year, they slightly slowed the pace from there to a single quarter-percentage-point cut in both 2026 and 2027 in a protracted fight to return inflation to the central bank’s 2% target.
Markets largely priced in the next rate cut to come in September, according to CME FedWatch.
Bank of America said it does not expect any rate cuts this year, though it will leave the door open for one.
Goldman Sachs said it expects only one rate cut this year.
Powell said confidence in easing inflation would be building if it wasn’t for tariffs. Trump has implemented a 10% tariff on most countries and 55% on China.
“Everyone that I know is forecasting a meaningful increase in inflation in the coming months from tariffs, because someone has to pay for the tariffs,” he said.
May’s consumer price data showed inflation rose less than anticipated, but economists have warned that the tariff-related impact will start creeping into data this summer.