President Donald Trump renewed attacks on Federal Reserve Chair Jerome Powell, calling him “a stupid person.” Speaking on Fox News, the president demanded interest rates be cut to 1% or 2%, well below the current 4.25% to 4.5% range. Trump accused Powell of driving up refinancing costs on $9 trillion in government debt and pledged to replace him with someone committed to slashing rates. Trump had previously threatened to fire Powell, causing concern in bond markets. After legal advisers warned this could breach Fed independence, Trump pledged to appoint a rate-cutting successor instead. Treasury Secretary Scott Bessent said a nomination could come by October, potentially forming a “shadow Fed” ahead of Powell’s May 2026 term end. Critics warn that political interference could harm the Fed’s credibility and lead to higher inflation.
