Trump calls Fed's Powell a ‘moron' after central bank holds interest rates steady

• Trump claims Powell is harming national security and that the U.S. should have the 'lowest interest rate of any country in the world' due to tariff revenue inflows
• The Justice Department opened an investigation into Powell earlier this month regarding his congressional testimony about the Fed's building renovations, which Powell called 'unprecedented'
• Tensions escalate as the Supreme Court weighs Trump's authority to remove Fed Governor Lisa Cook and the White House considers a successor to Powell

Summary

President Trump intensified his criticism of Federal Reserve Chairman Jerome Powell following the Fed's decision to hold interest rates steady, calling him a "moron" in a Thursday Truth Social post. Trump argued that with inflation no longer a threat, the U.S. should have "substantially lower" rates and claimed Powell is costing America "hundreds of billions of dollars a year in totally unnecessary interest expense."

Key Developments:

• The Federal Reserve announced Wednesday it would leave interest rates unchanged
• Trump, who nominated Powell in 2017, has escalated pressure for rate cuts throughout the year, using increasingly personal attacks
• The Justice Department recently opened an investigation into Powell regarding his congressional testimony about the Fed's Washington building renovations
• Powell publicly confirmed the "unprecedented" investigation on January 11, calling it another example of Trump's ongoing threats against the Federal Reserve
• The Fed Chairman told reporters Wednesday that he would not comply if asked to resign

Market Implications:

This confrontation represents the most challenging period of Powell's eight-year tenure at the Fed. The escalating tension raises concerns about central bank independence, a cornerstone of monetary policy credibility. The situation is further complicated by pending Supreme Court consideration of the president's authority to remove Fed Governor Lisa Cook, and White House discussions about Powell's potential successor.

Trump's argument centers on his belief that tariff revenue should enable the U.S. to have the world's lowest interest rates, while claiming current policy harms national security and economic competitiveness.