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President Trump on Monday lobbed another broadside at Fed Chair Jerome Powell in an invective-laced note scrawled on a list of central bank interest rates around the world — accusing him of costing “the USA a fortune.”
“Jerome, you are, as usual, ‘too late.’ You have cost the USA a fortune and continue to do so. You should lower the rate, by a lot! Hundreds of billions of dollars being lost,” Trump wrote in his trademark large, all-capital style that included his signature.
Trump also wrote “should be here” next to the column that ranked interest rates from lowest to highest by nation — and scribbled a bracket between Japan’s 0.5% and Denmark’s 1.75%, according to the missive brandished by press secretary Karoline Leavitt during a White House briefing.
He also posted the image to his Truth Social account, with further commentary saying that being a central banker in the US was “one of the easiest, yet most prestigious jobs in America, and they have FAILED…We should be paying 1% interest, or better!”
Trump said that Powell and the rest of the Federal Reserve Board of Governors should be “ashamed of themselves.”
Policymakers have kept the Fed rate at between 4.25% and 4.5% since December as inflation remains above its 2% target.
The inaction has infuriated Trump, who has walked back threats to fire Powell before his term expires in 2026. Trump cannot fire Powell over a policy dispute, but last week urged him to resign.
Meanwhile, Treasury Secretary Scott Bessent — who has been named as a possible successor to Powell — began mapping out the likely plan for naming the next Fed Chair.
On Monday, he pointed to a more conventional handover of power at the Fed instead of attempts to influence monetary policy through early appointment of a “shadow chair” or other methods.
Fed Governor Adriana Kugler’s term on the board expires on Jan. 31, 2026, providing an option for Trump to name a governor for a full 14-year term who could later be promoted to chair.
“There’s a seat opening up, a 14-year seat opening up in January. So we’ve given thought to the idea that perhaps that person would go on to become the chair when Jay Powell leaves in May, or we could appoint the new chair in May,” Bessent said on Bloomberg TV.
“Unfortunately, that’s just a two-year seat.”
Powell’s term as chair ends next May, and his own seat on the board only extends to Jan. 31, 2028.
While Powell is not required to leave the Fed Board after his term as chairman expires, that has been custom. His seat and Kugler’s are the only board spots that will expire during Trump’s term.
Bessent confirmed that there are current board members in the running to replace Powell.
“Obviously there are people who are currently at the Fed who are under consideration. So why would there be confusion, if you add another candidate in January,” he said.
Fed Governor Christopher Waller, appointed by Trump during the president’s first term, is reported to be among those Trump is considering for the job. Waller recently has said he would like to resume interest rate cuts as soon as the Fed’s next meeting in late July.
Others said to be in the running include Trump economic adviser Kevin Hassett and former Fed Governor Kevin Warsh.
Trump on Friday said he wouldn’t appoint anyone to lead the central bank who does not back immediate interest rate cuts.
A growing number of Fed officials, though still in the minority, have joined the call for interest rate cuts as soon as policymakers’ next meeting.
On Monday, Goldman Sachs analysts moved up their projection for the next interest rate cut to September, citing “a bit smaller” impact on inflation from Trump’s tariffs than initially expected.
“While it is far from clear, we think the odds of a cut in September are somewhat above 50% because we see several routes to get there – underwhelming tariff effects, larger disinflationary offsets, and either genuine labor market softness or a scare from month-to-month volatility,” the bank’s economics team, led by chief economist Jan Hatzius, wrote in a note.
“We suspect that the Fed leadership shares our view that tariffs will only have a one-time price level effect.”
Goldman expects three quarter-point cuts this year. The bank also lowered its “terminal rate forecast” to 3% to 3.25%, down from 3.5% to 3.75%.
The bank ruled out a cut following July meeting, “barring much weaker-than-expected employment data this week.”
While the labor market is still relatively “healthy,” it has grown harder to find a job “and both residual seasonality and immigration policy changes pose near-term downside risk to payrolls,” the economic team wrote.
The Fed receives new jobs data on Thursday, covering the month of June, which will indicate if the labor market is beginning to sputter, a development that could also add to the case for rate cuts sooner rather than later. New inflation data is released next week.
July 9 is also top of mind for the Fed: That’s the day the current suspension of some of Trump’s tariffs expires, and it remains unclear whether import taxes will skyrocket or Trump’s program will be delayed again pending negotiations.
Federal Reserve Bank of Atlanta President Raphael Bostic repeated on Monday that he still sees the central bank cutting its interest rate target just once this year, while suggesting there’s no urgency to act given the level of uncertainty.
“I think we actually have some luxury to be patient because labor markets are actually quite solid,” Bostic said in an event hosted by Market News International. “I think there is actually more pricing to come, and it is more a question of time, of when and not if…This is still going to take some time before we’ll sort of know the answer to those sorts of things.”
With Post wires
English (US)