Trump’s Dispute with the Fed Highlights the Strain Between Political Influence and Central Bank Autonomy

On Wednesday, President Donald Trump intensified his open attacks on the Federal Reserve, issuing a direct warning to Treasury Secretary Scott Bessent that the issue of high interest rates must be resolved or there would be serious repercussions. Speaking at a prominent U.S.-Saudi Investment Forum in Washington, D.C., Trump labeled Federal Reserve Chair Jerome Powell as "grossly incompetent" and stated, "If you don't sort this out quickly, I'll have to fire you. OK?" These comments highlighted Trump's ongoing dissatisfaction with the Fed's monetary decisions and increased the pressure on his administration to push for lower borrowing costs as inflation worries persist

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The president's remarks came during a meeting with Saudi Crown Prince Mohammed bin Salman, who, at the same event, pledged to invest $1 trillion in the United States. Despite the international focus, Trump shifted the conversation to domestic economic matters, criticizing the Fed's recent choice to keep interest rates high. "Rates are just too high," he insisted, blaming Powell for wasting $4 billion on what he called a "tiny building" for the Fed's headquarters. Trump once again called for rate reductions, contending that elevated borrowing costs worsen the financial burden on Americans. "Mortgages and car loans are unaffordable," he continued,

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Bessent, who previously worked as a hedge fund executive and now serves as Trump's Treasury Secretary, has played a central role in the administration's anti-inflation efforts.

, Trump's plan to send $2,000 tariff rebate checks to Americans would need approval from Congress, casting doubt on its practicality but commending the president's "solutions" to cost-of-living challenges. The Treasury Secretary also pointed to Trump's recent executive order removing tariffs from more than 200 imported foods, such as coffee and bananas, as part of a larger plan to reduce prices for consumers.

Trump's statements at the forum came after a turbulent week for his administration. The president has repeatedly referred to Powell as "stupid" and "too late Powell," intensifying demands for rate cuts as his economic approval ratings slip.

represents an unusual level of transparency about his intent to potentially replace Powell, despite earlier assertions that "people are stopping me" from taking action. The Federal Reserve, which has so far taken a cautious stance on lowering rates, has not yet commented on Trump's latest remarks.

The administration's economic plans have encountered obstacles beyond the Federal Reserve.

, though favored by some constituents, remains stalled without legislative backing. At the same time, the president's proposals to cut healthcare costs and broaden tax relief for working families are expected to pick up speed in the near future, according to a senior official at the White House.

As Trump continues to present his economic agenda as a response to inflation and affordability issues, his public disputes with the Fed underscore the ongoing friction between political leaders and the central bank's independence. With the 2026 midterm elections drawing closer, the administration's success in fulfilling these promises may determine the direction of its economic strategy and the future autonomy of the Federal Reserve.