Trump stated that Powell's speech on Wednesday was "another typical, complete chaos," accusing Powell of always being slow to act and claiming that the only good thing he can do is to cut interest rates.

Written by: Zhang Yaqi, Li Dan

Source: Wall Street View

As the European Central Bank continues to cut interest rates, Federal Reserve Chairman Powell seems to be "not listening to advice." U.S. President Trump appears to be angry, calling out Powell three times in one day and demanding interest rate cuts, even going so far as to say that Powell should have been fired long ago.

On Thursday morning, Eastern Time, Trump posted on social media:

"Always too late and wrong, 'Federal Reserve Chairman Jerome Powell released a report yesterday, which is another typical, complete 'chaos'!

Powell should have lowered interest rates long ago, like the European Central Bank, but he should definitely lower them now. The sooner Powell leaves, the better!

During the midday trading session on Thursday, Trump again called out Powell twice.

Trump said, "I don't think Powell is doing his job well. If I ask for it, he has to leave. Powell does not make me happy. He is always slow to act."

Trump accused Powell of manipulating politics, saying he is too bad. Interest rates in the U.S. have risen, and rates should be pushed down. Powell should cut interest rates. Trump also compared it to Europe, saying Europe is cutting rates.

A few minutes later, Trump again "attacked" Powell, saying the Federal Reserve should cut rates, which is what the Fed owes the American people. Powell will face significant political pressure.

Trump said the only good thing Powell can do is to cut interest rates. If Europe cuts rates while the Federal Reserve remains indifferent, it will put the U.S. at a disadvantage. Costs are down, and U.S. inflation is minimal.

Trump's remarks are clearly a response to Powell's hawkish statement from the night before. On Wednesday, Powell reiterated what he said over a week ago, stating that the Federal Reserve "can fully wait until (the situation) is clearer, and then consider adjusting our policy stance." Powell believes that tariffs and other policies from Trump create high uncertainty for the economy, and the Fed needs to avoid tariffs from persistently pushing up inflation.

In fact, Trump has long been dissatisfied with Powell. Trump feels that Powell is "slow to act" in combating inflation. He has repeatedly urged interest rate cuts on social media, telling Powell to "act quickly."

Supreme Court Ruling May Affect Powell's Tenure

On Monday, rumors emerged from the White House about a "change in leadership" at the Federal Reserve. U.S. Treasury Secretary Mnuchin stated that he and Trump have "been considering" candidates for the next Federal Reserve Chairman and plan to start interviewing potential candidates in the fall.

This statement has reignited speculation about changes in the Federal Reserve's leadership. Notable financial analyst Jim Bianco believes that Powell may face two fates: either being directly dismissed by Trump or being sidelined, as the nominee for Powell's successor could make statements that undermine his authority.

It is worth noting that a Supreme Court ruling in May could become a "black swan" event this summer. Trump's administration is preparing to ask the Supreme Court to dismiss two high-ranking officials from federal agencies.

Some analysts point out that the final ruling in this case will test "whether Trump has the authority to dismiss Federal Reserve Chairman Powell"—despite the current Federal Reserve Act stipulating that the dismissal of the Federal Reserve Chairman requires "just cause," if the Supreme Court overturns the precedent set by the "Humphrey’s Executor" case, it would undoubtedly greatly weaken this protective barrier and open the door for presidential intervention in the Federal Reserve's operations.

In other words, by changing the legal rules, Trump may be able to "easily" dismiss the Federal Reserve Chairman in the future.

On Wednesday, when asked about the political threats facing the Federal Reserve Chairman position, Powell stated that the independence of the Federal Reserve is granted by U.S. law, and the government cannot dismiss Federal Reserve officials without cause. He said, "Our (Federal Reserve's) independence is a legal issue."

Powell stated that the Federal Reserve will continue to do what it needs to do, unaffected by political influences. Regardless of the political pressure faced, the Federal Reserve will do its job well.

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