Trump Demands Fed Rate Cuts, Warns Board to Step In

In a fiery post on his platform, Truth Social, U.S. President Donald Trump demanded immediate cuts to interest rates. He also said that if the current Federal Reserve Chair, Jerome Powell, doesn’t act, then the rest of the board should step in and take control. His post comes at a time when the U.S. economy is under pressure and the 2024 election is fast approaching.

“Jerome ‘Too Late’ Powell, a stubborn MORON, must substantially lower interest rates, NOW,” Trump wrote. “IF HE CONTINUES TO REFUSE, THE BOARD SHOULD ASSUME CONTROL, AND DO WHAT EVERYONE KNOWS HAS TO BE DONE!”, Trump stated.

The post, reported by Coin Bureau, has sparked strong reactions from economists, investors, and political observers. Many are now questioning what this means for the future of the U.S. economy and the independence of the Federal Reserve.

Trump vs. The Fed: A Long-Running Feud

Trump’s frustration with the Fed is not new. Even during his time in office, he clashed with Powell over interest rates. He believed the central bank raised rates too fast, which slowed down economic growth.

With the election coming up, Trump is once again asking for lower interest rates. He says these high rates are hitting everyday people hard—making it tough to buy a home, get a loan, or keep a small business running.

What Do Interest Rates Actually Do?

Interest rates decide how much you pay when you borrow money. When the rates are increased, loans are more expensive, so people tend to spend less. That can help slow down rising prices. But when rates are low, borrowing becomes cheaper, and so people spend more. Which in turn can help the economy grow. It’s how the government tries to keep the economy steady. 

Over the past two years, the Fed has raised rates to fight inflation. Prices were rising fast after the pandemic, and the Fed stepped in to slow things down. Inflation has dropped since then, but Powell says it’s still too early to lower rates again.

That’s where Trump disagrees—loudly.

Can the Fed Board Really Step In?

The Federal Reserve Board doesn’t usually override its chair. Powell is one of several people who vote on rate decisions. The board can step in if needed, but it’s not something they usually do. Doing that could shake up the financial system and make people lose trust in the Fed.

Trump’s demand has many experts worried. They believe politicizing the Fed could do more harm than good. Economist Diane Swonk said, “The Fed needs to stay independent. Pressure from politicians could hurt its ability to manage inflation and jobs fairly.”

What Happens Next?

Markets haven’t reacted strongly—yet. If Trump keeps pushing like this, investors might start betting on rate cuts, even if the Fed isn’t planning to lower them. That could make the market more unstable.

President Biden’s team hasn’t commented, but this moment highlights a deeper issue. America’s central bank may be caught between doing what’s best for the economy and responding to political attacks.

As 2024 approaches, expect the fight over interest rates to become louder, messier, and far more political.