Trump Sends Handwritten Letter to Fed Chair Powell Demanding Significant Interest Rate Cuts

 

Former U.S. President Donald Trump intensified his criticism of Federal Reserve Chair Jerome Powell and the Federal Open Market Committee members on Monday, calling for a sharp reduction in interest rates amid ongoing pressure to lower borrowing costs.

Trump posted on his social media platform that "The Federal Reserve should be ashamed of itself for allowing this to happen in the United States." Although he did not specify if his criticism targeted only the board members or all policymakers, including regional Federal Reserve Bank presidents who also vote on monetary policy, his message was clear.

Alongside the statement, Trump shared a chart ranking global central banks by their benchmark interest rates, highlighting that the U.S. has among the highest rates. A handwritten note on the chart directly accused Powell of costing the United States "a fortune" and continuing to do so.

White House spokeswoman Caroline Leavitt confirmed at a press briefing that Trump had sent the chart to the Fed. Trump added, "The Fed just sits and watches, so they are responsible as well. We must have 1% interest or less!"

Why Has the Fed Not Cut Rates?

Trump has repeatedly lambasted Powell for failing to reduce interest rates to levels he deems appropriate, despite Powell being a Trump appointee in 2018. Trump argues that the federal government is currently paying massive interest bills on the national debt because the Fed has not lowered rates. Leavitt emphasized the American public's desire to borrow at low costs, criticizing the persistently high rates.

While other central banks like the European Central Bank and Bank of Mexico have cut lending rates multiple times this year, the U.S. Fed has held steady. This cautious stance is partly due to recent economic policy shifts since Trump's return to power, with officials preferring to observe the impact before acting.

Powell has refrained from responding directly to Trump's attacks, focusing instead on controlling inflation and maintaining labor market strength. During a Senate hearing on June 24, he stated that political factors do not influence Fed rate decisions.

In his recent semi-annual report to Congress, some lawmakers praised Powell’s data-driven approach and his commitment to the Fed's independence, a view echoed by global central bankers. At a banking conference in Sintra, Portugal, ECB President Christine Lagarde called for applause for Powell, describing him as embodying "the courage of monetary policy makers."

Trump Hints at Early Announcement of Powell’s Successor

Although Powell’s term expires in May 2026, Trump announced plans to soon name his nominee for the next Fed chair. This unprecedented early announcement could cause market confusion, weaken the U.S. dollar, and push up long-term interest rates, experts warn.

Potential candidates include:

• Treasury Secretary Scott Beissinger

• Former Fed Governor Kevin Warsh

• Current Board Member Christopher Waller

• White House Economic Council Director Kevin Hassett

• Former World Bank President David Malpass (Trump’s first-term nominee)

In a Fox Business interview, Trump said, "We will appoint someone at the Fed who will be able to cut rates." On Kevin Warsh, he commented, "Kevin is very talented, but I don’t know if he will take the job. He’s definitely talented though. He certainly won’t do what Powell is doing."

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Donald Trump, Jerome Powell, Federal Reserve, Interest Rates, Fed Chair, US Economy, Monetary Policy, Inflation, Economic Policy, Interest Rate Cuts, Treasury Secretary, Federal Open Market Committee, Central Banks, US Dollar, Economic Outlook, Powell Successor