President Trump on Friday called on the Federal Reserve Board to “assume control” if Jerome Powell does not slash rates soon, ramping up his attacks on the beleaguered Fed chair.
“Jerome ‘Too Late’ Powell, a stubborn MORON, must substantially lower interest rates, NOW. If he continues to refuse, the board should assume control, and do what everyone knows has to be done!” Trump wrote in a post on Truth Social Friday morning.
Shortly after Trump’s attack, Fed Governor Adriana Kugler announced she will step down next Friday. Kugler, appointed by former President Joe Biden in 2023, was slated to serve until January.
Her exit gives Trump the chance to add another ally in his push lower interest rates.
The 12-member Fed board had voted Wednesday to maintain rates in the target 4.25% to 4.5% range and downgraded its view of the economy because of Trump’s tariffs.
In the post-meeting press conference, Powell, whose term ends next May, wouldn’t commit to a cut when policymakers next gather in September.
Fed Governors Christopher Waller and Michelle Bowman voted against Powell’s “wait and see” approach — marking the first time in three decades when more than one governor on the board has dissented on an interest-rate vote.
On Friday, both officials — who were appointed by Trump in his first term — called for an immediate quarter-percentage-point reduction, arguing that Trump’s tariffs will likely only have a brief impact on inflation.
“I believe that the wait and see approach is overly cautious, and, in my opinion, does not properly balance the risks to the outlook and could lead to policy falling behind the curve.”
Bowman, who serves as the Fed’s vice chair for bank supervision, said, “I see the risk that a delay in taking action could result in a deterioration in the labor market and a further slowing in economic growth.”
The Labor Department on Friday reported that nonfarm payrolls rose by a smaller-than-expected 73,000 jobs last month. The unemployment rate edged up one-tenth of a percentage point to 4.2% in July.
The report appeared to give credence to the hiring concerns flagged by the two Fed dissenters.
While Trump has pushed for a 3 percentage-point reduction, Waller and Bowman called for more gradual action.
Waller suggested cutting by as much as 1.5 percentage points, albeit at a slow pace, while Bowman simply backed the concept of “gradual cuts.”
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