U.S. President Donald Trump reacted heavily on social media to the Fed's decision to keep the Fed's policy rate fixed at 4.25-4.50 percent, targeting Fed President Jerome Powell as “stupid,” “too late,” “too political.” Trump not only criticized Powell in his post reiterating calls for interest rate cuts, but also accused the ongoing high-cost renovation project at the central bank's headquarters of “corruption.” All of these developments have brought the Fed—Trump tension back into the global agenda.

Trump, in a post on his platform Truth Social, used the following statements for Powell:

“Jerome 'Too Time' Powell did it again!!! It is TOO LATE and even TOO ANGRY, TOO STUPID and TOO POLITICAL to assume the post of Fed Chair. Costing our country TRILLIONS of DOLLARS, it also carries out one of the most inept or corrupt building renovations in construction history! In other words, 'Too Time' is a complete LOSER and our country is paying the price!”

This release is a continuation of Trump's response to Powell in July 2025. In a similar post in June, Trump described Powell as an “idiot who really has no idea” contentReference [oaicite:1] {index=1}.

The Fed's Decision and Background

• At its meeting on July 30, the Fed held interest rates steady at the 4.25-4.50% band for the fifth consecutive time:contentReference [oaicite:2] {index=2}.
• Inflation rose to 2.7%; the labor market is resilient; economic growth recovered by 3% in Q2:ContentReference [oaicite:3] {index=3}.
• Two Trump appointees in the decision—Christopher Waller and Michelle Bowman—voted in favor of the rate cut, marking the first time multiple dissenting votes within the Fed: ContentReference [oaicite:4] {index=4}.
• Powell opposed political pressures overshadowing monetary policy with an emphasis on independence:ContentReference [oaicite:5] {index=5}.
• Powell also noted that Trump's tariffs are starting to push up inflation expectations, and consumers are gradually shouldering those costs:ContentReference [oaicite:6] {index=6}.

The Trump‑Powell Tension: A Historical Perspective

The tension between Trump and Jerome Powell is an ongoing conflict that has been ongoing since 2018. Trump has repeatedly targeted Powell for his interest rate hikes, using phrases such as “crazy,” “crazy,” “crazy,” “Powell my only bad choice” on social media and in public utters:ContentReference [oaicite:7] {index=7}.

In a “handwritten note” shared in June, Trump told Powell he needed to cut interest rates immediately, saying it was “too late”; the Fed's decision cost the country “trillions of dollars,” ContentReference [oaicite:8] {index=8}.

The impact of Trump's messages on the markets has been assessed by analysts: JPMorgan's Volfefe Index found significant correlation between Trump tweets and financial markets:ContentReference [oaicite:9] {index=9}.

Effects on the Market and Political Arena

While short-term volatility is observed in US indices following the Fed decision, investors are watching Powell's statements carefully. While Trump's aggressive rhetoric does not create a general selling pressure in the markets, there are warnings that it will increase political uncertainty:ContentReference [oaicite:10] {index=10}.

Analysts note that Trump's criticisms will reignite debate over the Fed's independence, and monetary policies may become the focus of more policy as the election process:ContentReference [oaicite:11] {index=11}.

Why Is It Important?

• The independence of the Fed preserves the reliability of the US Central Bank and the effectiveness of monetary policy. Trump's pressure puts that principle at risk.
• Asking for an interest rate cut at a time when the US is growing at 3% points to a potential mismatch between policymakers and economic reality.
• Powell's term expires in May 2026. Trump's imposition of a new leader could come up in the closer election cycle.