- President Donald Trump has relentlessly attacked Fed Chairman Jerome Powell since he retook office, most recently calling him a “fool” Thursday morning after the Fed chose to hold interest rates steady the day prior. Yet, while Trump has indicated he could remove Powell if he wanted to, he may be keeping the Fed Chair around to serve as a scapegoat in case the economy shows signs of weakness.
Since retaking office, President Trump has relentlessly attacked Federal Reserve Chairman Jerome Powell. Yet despite the insults, Trump may be keeping Powell around for at least one key reason.
The president on Thursday launched his latest attack on Powell, calling him a “fool” after the Fed chose to hold interest rates steady on Wednesday.
″‘Too Late’ Jerome Powell is a FOOL, who doesn’t have a clue. Other than that, I like him very much! Oil and Energy way down, almost all costs (groceries and ‘eggs’) down, virtually NO INFLATION, Tariff Money Pouring Into the U.S. — THE EXACT OPPOSITE OF ‘TOO LATE!’ ENJOY,” Trump wrote in a Truth Social post early Thursday.
The president has previously flip-flopped on whether he would dismiss Powell. During a meeting with Italian Prime Minister Giorgia Meloni last month, Trump claimed that if he wanted to, he could remove Powell “real fast.” Yet he later demurred, and in an interview with Meet the Press which aired this week, reiterated that he would not fire Powell.
“Why would I do that? I get to replace the person in another short period of time,” Trump said of removing Powell.
Powell’s term as Fed chairman is up in May 2026, and he has signaled that he wants to serve out the remainder of his term. Removing him would be a rare sign of interference with the independent central bank and would likely lead to market instability.
Still, Trump may have another good reason to keep Powell around, said Robert R. Johnson, a finance professor at Creighton University.
“My belief is that Trump’s criticism of Fed Chair Jerome Powell is an example of Trump setting up the scenario of ‘heads I win, tails you lose,'” Johnson told Fortune. “That is, according to Trump if the economy performs well his tariff policies and his general handling of the economy will be the reason. If the economy suffers a recession, then it is Powell’s fault.”
The weight of Trump’s baseline 10% tariffs, plus 145% tariffs on China, has already started showing up in the economy. Several companies have announced higher prices to come, and the U.S. GDP contracted for the first time in three years in the first quarter, according to the Commerce Department.
But the economy is not all bad. While the risks to unemployment and inflation have risen compared to March, Powell noted Wednesday that the economy’s fundamentals are strong.
“If you look through the sort of distortions in Q1 GDP, you’ve still got an economy that looks like it’s growing at a solid pace. The labor market appears to be solid. Inflation is running just a bit above 2%. So, it’s an economy that’s been resilient and is in good shape.”