In a dramatic escalation of his ongoing feud with Federal Reserve Chair Jerome Powell, President Donald Trump unleashed a fiery attack on May 20, 2025, declaring, “This Ends Now!” in a Truth Social post that sent shockwaves through financial markets. Trump’s latest outburst accused Powell of sabotaging the U.S. economy by refusing to slash interest rates, claiming the Fed’s inaction is choking growth amid his administration’s aggressive tariff policies. The president’s rhetoric, echoing his earlier calls for Powell’s “termination,” has reignited fears about the Federal Reserve’s independence and its ability to manage inflation without political interference.
Trump’s tirade came days after Powell warned at an Economic Club of Chicago event that the administration’s tariffs, including 145% levies on Chinese goods and 25% on Canada and Mexico, could fuel inflation and slow growth, making rate cuts risky. Trump dismissed these concerns, insisting there is “virtually no inflation” and pointing to falling oil prices, despite data showing grocery prices, including eggs, rose last month due to bird flu effects. He argued that “tariff money is pouring in,” making it the “perfect time” for rate cuts to boost borrowing for businesses and consumers.
The Fed, under Powell’s leadership, has held its benchmark rate at 4.25%–4.5%, the highest since 2007, citing sticky inflation above the 2% target. Powell, appointed by Trump in 2017 and reappointed by Biden in 2021, has steadfastly defended the Fed’s independence, stating that presidents cannot fire him except for “cause,” such as misconduct, a view backed by Supreme Court precedent. However, Trump’s recent firings of officials at other independent agencies, like the National Credit Union Administration, have raised concerns that he may test this legal boundary, especially with a Supreme Court case revisiting presidential removal powers looming.
Markets reacted sharply to Trump’s “This Ends Now!” statement, with the Dow dropping 500 points and the dollar weakening, reflecting investor fears of a politicized Fed. Posts on X amplified the tension, with some users cheering Trump’s aggression, claiming Powell is “sabotaging” the economy, while others warned that undermining the Fed’s autonomy could trigger a recession. Economists, including the IMF, have slashed U.S. growth forecasts, citing Trump’s tariffs as a key driver of economic uncertainty.
Despite earlier threats, Trump walked back firing Powell in April 2025, saying he had “no intention” of removing him before his term ends in May 2026. Yet, his renewed attacks, coupled with comments from advisor Kevin Hassett about exploring “new legal analysis” for Powell’s removal, suggest the issue remains live. Powell, unmoved, reiterated the Fed’s data-driven approach, refusing to rush rate cuts. The clash signals a precarious moment for the Fed’s credibility and the U.S. economy as Trump’s pressure tactics intensify.
