"Was nice, neutral and nasty": Trump bites off more than he can chew on Fed chief Powell

The US President is putting pressure on the central bank to lower interest rates. But Fed Chairman Powell appears immune to the attacks from the White House. Trump hints at his resentment.

In his unsuccessful campaign for a lower interest rate and in his attacks on Federal Reserve Chairman Jerome Powell, US President Donald Trump appears to be losing patience: "I've been nice, I've stayed neutral, and I've been nasty—and nice and neutral didn't work," Trump wrote on his Truth Social platform. He again called Powell a "fool," a "moron," and a "dumb guy."

Trump again called for a dramatic reduction in the federal funds rate to one to two percent. This could save the United States a trillion dollars annually, he wrote. He was alluding to the high cost of servicing the federal government's debt. The federal funds rate is currently at a high level, in the range of 4.25 to 4.5 percent; the Federal Reserve (Fed) left it unchanged in its most recent interest rate decision this week.

Dismissal would be a devastating signal to the financial markets

Trump's insults against Powell, whom he appointed during his first term, are hardly newsworthy anymore. However, the Republican's most recent post gave an insight into how he is struggling with the issue. "I fully understand that my strong criticism of him makes it harder to do what he should be doing, which is lower interest rates. But I've tried everything else," Trump wrote. Perhaps he should reconsider firing him, Trump suggested. At the beginning of May, he had said he would not do so. After all, the president now continued, Powell's term is ending soon. He has just under a year left at the helm of the Fed.

The question of whether Trump would actually be allowed to fire the head of the legally independent Federal Reserve is uncharted legal territory. Most experts believe that Trump would not be allowed to do so. Were he to attempt it anyway, it would likely cause turmoil in the financial markets.

Powell himself has always shrugged off the criticism. When he announced on Wednesday that the Fed would keep the key interest rate at its current level, he emphasized that the central bankers' monetary policy was focused solely on their mandate: to ensure stable prices and promote full employment.