Trump takes charge against Fed's Powell

President Trump has unleashed an internal governmental war between Fed chair Jerome Powell and himself.

Fed chair Powell.

The president was previously very close allies to Powell. A staunch conservative, Powell made a brilliant campaign for Fed chair to replace Janet Yellen in 2018, even gaining the support of the then-president Trump to nominate him for the position. As Fed chair, he has made promises to keep rates low while supporting conservative fiscal policy in the government, even during the 4-year interim presidency of Joe Biden between Trump's two respective reigns.

However, Powell has pursued quite the contrary fiscal policy in the Federal Reserve during the later Biden years and Trump's 2nd term so far. Instead of wanting to slash rates like what Trump has promised time and time again, Powell kept rates high or even raised rates in order to combat inflation. While effective at preventing the steady rise of prices, his interest rates hikes have garnered him a great deal of criticism from conservatives who now deem him as someone who is weighing down their complex agenda in the executive branch. Powell, logically, has cited inflation as a reason for backtracking his previous low-rate policy, but the president and his supporters are not keeping up with his decisions.

At first, although acknowledging the Fed's hesitancy to not cutting rates as a problem, Trump did not actually consider firing Powell, stating that Powell would help continue to drive his policies forward. But, as more individuals in the executive branch like Elon Musk break with him on tariff policy, Trump's own political paranoia and urge for minimal resistance in his own home camp has resulted in him flirting around ideas of replacing Powell.

While Trump has not yet formally announced his intention to fire Powell, he has stated in individual dialogues that someone more loyal would better serve the position.