Topline
President Donald Trump on Thursday claimed the U.S. should be paying the lowest interest rates in the world after the Federal Reserve voted to pause cuts, as the central bank and Fed Chair Jerome Powell have resisted pressure from the Trump administration in recent weeks.
“The Fed should substantially lower interest rates, NOW!” Trump wrote.
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Key Facts
Trump, writing in a Truth Social post on Thursday, claimed that because of the “vast amounts of money flowing into” the U.S. because of his tariffs, “we should be paying the LOWEST INTEREST RATE OF ANY COUNTRY IN THE WORLD.”
The Federal Reserve on Wednesday voted to keep interest rates between 3.5% and 3.75%, though two Fed officials—Stephen Miran, a Trump appointee, and Christopher Waller—argued for a quarter-point reduction.
Powell, following the Fed’s vote, said there was “broad support” for holding interest rates.
Trump said Powell “refused” to cut interest rates, calling the Fed chair a “moron” and claiming Powell has “absolutely no reason to keep them so high,” adding, “The Fed should substantially lower interest rates, NOW!”
The Fed’s “dot plot,” which outlines the central bank’s policymaking expectations, indicated last month that one quarter-point cut to interest rates is expected in 2026, followed by another in 2027, when rates are projected to hit between 3% and 3.25%.
What Did Jerome Powell Say About Interest Rates?
Powell said Wednesday the central bank remains “well-positioned” to assess whether further interest rate cuts will be needed this year, noting the economy “expanded at a solid pace” in 2025 and began 2026 on “a firm footing.” Powell said that, while job gains have remained low, the unemployment rate has “shown some signs of stabilization” as inflation remains “somewhat elevated.”
When Will Trump Replace Jerome Powell?
Trump, during a rally in Des Moines, Iowa, indicated he would nominate Powell’s successor “pretty soon.” Stephanie Roth, Wolfe Research’s chief economist, wrote in a note the “single most likely window” for Trump to announce Powell’s successor would be around the Fed’s latest policymaking meeting, and that the decision could come “as soon as this week, or within the next couple of weeks.”
Who Is The Favorite To Succeed Jerome Powell?
Trump said last week the list of candidates for Jerome Powell’s replacement was “down to two,” though he noted he had one candidate in mind. Former Fed Governor Kevin Warsh, National Economic Council chief Kevin Hassett, BlackRock executive Rick Rieder and Waller have emerged as the likely frontrunners in recent months, though Polymarket oddsmakers now favor Rieder as the favorite at 37% odds, followed by Warsh (32%) and Waller (15%).
Surprising Fact
Powell, whose term as Fed chair expires in May, offered advice to his successor: “Stay out of elected politics.”
Key Background
Powell announced earlier this month that the Fed was served grand jury subpoenas threatening a criminal indictment over Powell’s testimony before the Senate Banking Committee last year. Powell criticized the move as an “unprecedented action” by the Trump administration that should be viewed in the “broader context of the administration’s threats and ongoing pressure.” Powell said he believed he was targeted because of his unwillingness to lower interest rates at Trump’s request. Economists and former Fed officials condemned the probe, claiming it was an “unprecedented attempt” to undermine the Fed’s political independence. Last year, Trump said he was firing Fed Governor Lisa Cook over alleged mortgage issues, though the Supreme Court signaled earlier this month they believed Trump could not legally fire Cook.