President Donald Trump on Thursday met with Federal Reserve Chair Jerome Powell for the first time in his second term, scolding him for not lowering borrowing costs. Powell maintained that any decisions won’t be based on the president’s demands.
The meeting, which comes after months of unrelenting attacks from Trump against the Fed chief, took place at the White House and was at Trump’s request.
“Chair Powell did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook,” the Fed said in its statement.
Trump has described Powell as a “fool” and “a major loser,” while also saying that the Fed chief’s termination “cannot come fast enough.” His harsh criticism of Powell is mostly centered on the central bank not lowering interest rates quickly enough for his own liking.
In a Thursday afternoon briefing, White House press secretary Karoline Leavitt confirmed the two had met, adding: “The president did say that he believes the Fed chair is making a mistake by not lowering interest rates, which is putting us at an economic disadvantage to China and other countries, and the president has been very vocal about that, both publicly, and now, I can reveal, privately as well.”
Trump appointed Powell to helm the US central bank starting in 2018, with his term ending in May 2026. Powell has stayed mum amid Trump’s attacks, stressing that the Fed’s decisions are all rooted in economic data in striving for the central bank’s dual goals of stable prices and maximum employment.
Powell has said he has never sought out a meeting with a sitting US president.
“I don’t think it’s up to a Fed chair to seek a meeting with the president, although maybe some have done so. I’ve never done so, and I can’t imagine myself doing that,” Powell said earlier this month.
The last known meeting between Trump and Powell was in 2019.
Trump has toned down his condemnation of Powell recently: While he still contends that the Fed is behind the curve at lowering borrowing costs, he is no longer calling for the Fed leader’s resignation. In an NBC News interview that aired earlier this month, Trump said he won’t fire Powell because he’ll get to “change him very quickly anyway … you know, it’s in a very short period of time.”
Trump changed his tune when top administration officials warned him privately of the financial market chaos that could ensue if he were to proceed with sacking Powell, CNN previously reported. Investors were worried that the Fed’s independence, which academics argue is essential for the stability of the US economy, was at risk with Trump threatening to fire Powell.
While it seems that Trump is backing down for now, there’s still the possibility that his administration could figure out some way to shake up the top ranks at the Fed. The Supreme Court earlier this month ruled that Trump doesn’t have to rehire senior officials he fired from two independent federal labor agencies that enforce worker protections.
The case could have implications for the Fed — though administration officials have said that’s not the case. The justices have also said as much.
“The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States,” the court said, adding that the justices “disagree” that it means anything for the Fed.
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