Trump slams Powell after rates held steady, calls them 'absolutely unnecessary'

WASHINGTON, DC: President Donald Trump on Thursday, January 29, sharply criticized Federal Reserve Chair Jerome Powell and renewed demands for sweeping interest rate cuts, weighing in publicly after the central bank declined to lower rates.

Trump accused Powell of damaging the US economy and national security while calling for the lowest interest rates of any country in the world. His comments followed a Federal Reserve decision to hold rates steady despite recent cuts. 

Trump targets Powell, calls for aggressive rate cuts

In a post on Truth Social, Trump said Powell had “again refused to cut interest rates,” despite the decision being made by the Federal Reserve’s 12-member Federal Open Market Committee.

He claimed the central bank had “absolutely no reason to keep them so high.” Trump accused Powell of “hurting our country and its national security” and referred to the Fed chair as a “moron” who is “costing America Hundreds of Billions of Dollar a year in totally unnecessary and uncalled for INTEREST EXPENSE.”

The president argued that revenue generated by tariffs justified deep rate cuts, even though he did not explain how tariff income relates to the Federal Reserve’s benchmark overnight lending rate.

Import tariffs are paid by US importers rather than foreign governments, contrary to Trump’s frequent claims. “Because of the vast amounts of money flowing into our Country because of Tariffs, we should be paying the LOWEST INTEREST RATE OF ANY COUNTRY IN THE WORLD,” Trump wrote.

He repeated his call for immediate action, urging the central bank to “substantially lower interest rates, NOW,” and again tied monetary policy to his tariff agenda.

Several of Trump’s tariff actions are currently facing a Supreme Court challenge that could invalidate many of the measures enacted under emergency authorities.

“Tariffs have made America strong and powerful again, far stronger and more powerful than any other Nation,” Trump added. “Commensurate with this strength, both financial and otherwise, WE SHOULD BE PAYING LOWER INTEREST RATES THAN ANY OTHER COUNTRY IN THE WORLD.”

Federal Reserve holds rates amid political and legal pressure

The Federal Reserve left interest rates unchanged on Wednesday, January 28, a decision that came amid heightened scrutiny of the central bank’s independence. The Federal Open Market Committee voted 10–2 to maintain the target range for the federal funds rate after three consecutive months of rate cuts. Two governors Christopher Waller and Stephen Miran, both appointed by Trump dissented, advocating for a quarter-percentage-point reduction.

In its statement, the committee said, “Available indicators suggest that economic activity has been expanding at a solid pace. Job gains have remained low, and the unemployment rate has shown some signs of stabilization. Inflation remains somewhat elevated.” 

The statement added, “The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run." Powell has also been under pressure following confirmation that the Department of Justice launched an investigation related to the Fed’s leadership.