Trump Calls Federal Reserve Chair He Cannot Legally Fire 'Major Loser,' Resolves Long-Standing Concern That Independent Central Bank Was Setting Monetary Policy Based On Data

WASHINGTON. President Donald J. Trump on Monday escalated his ongoing campaign of public pressure against Federal Reserve Chair Jerome H. Powell by branding the central banker a "major loser" and "Mr. Too Late" on Truth Social, resolving a long-standing administration concern that the Federal Reserve had been making decisions about the cost of money based on the Federal Reserve's reading of economic data rather than the President's reading of his own political needs.

The post followed days of public commentary in which Mr. Trump had asserted that "Powell's termination cannot come fast enough," demanded the Fed cut interest rates immediately to offset inflation generated by the tariffs Mr. Trump had himself imposed, and reflected aloud on his authority to remove a Fed chair he could not legally remove. The Federal Reserve Act of 1913 permits the President to remove a Fed governor only for cause, a phrase courts have interpreted to mean serious misconduct rather than disagreement with monetary policy. The Supreme Court had specifically identified the Federal Reserve as a constitutionally permissible exception to presidential removal authority, a holding the President was reportedly not familiar with.

Markets responded by entering what one analyst characterized as the third leg of the President's first hundred days financial crisis. The Dow Jones Industrial Average fell more than 900 points by the close of Monday trading. The S&P 500 dropped roughly 2.4 percent. The U.S. dollar fell to a three year low against the euro. Ten year Treasury yields rose, an outcome the textbook describes as inconsistent with a flight to American assets and instead consistent with investors concluding that American assets had become less safe. "We are watching a sitting president attempt to politicize the world's most important central bank in real time," said one economist who declined to be named for fear of his next sentence becoming the subject of a Truth Social post.

The President, asked Tuesday afternoon whether he intended to actually fire Mr. Powell, said only that he had "no intention" of doing so, a clarification market participants greeted as the first piece of monetary policy guidance the administration had issued that did not move markets in the wrong direction. Mr. Trump nonetheless added that the Fed chair "should be cutting rates," that interest rates were "too high," and that Mr. Powell was "playing politics," a charge the President offered while attempting to publicly remove a Fed chair for declining to cut rates ahead of a midterm election.

Mr. Powell had earlier that month explained at the Economic Club of Chicago that the President's tariffs would likely cause both higher inflation and slower growth, leaving the central bank with no version of its dual mandate it could fully pursue. The Fed chair did not respond directly to the President's social media posts, the central bank having concluded several months earlier that responses tended to extend the news cycle rather than end it.

At press time, the President was being briefed by aides on the difference between the Federal Reserve and the executive branch, a tutorial sources within the administration described as ongoing.