Trump Is Laying the Groundwork to Blame Powell for Any Downturn

Fed's Legitimacy Is at Risk as President Attacks It for Cutting Rates Before Election but Not Now

- Nick Timiraos

President Trump is signaling that he will blame the Federal Reserve for any economic weakness that results from his trade war if the central bank doesn't cut interest rates soon. In the process, he might also be seeking to delegitimize the historically independent institution in a way that could undermine its effectiveness.

In a social-media post on Monday, Trump repeated last week's demand that the Fed reduce interest rates now. "There is virtually no inflation," he said, blasting Fed Chair Jerome Powell as "Mr. Too Late" and "a major loser."

He also accused the central bank of lowering interest rates last fall to influence the 2024 election. "Powell has always been Too Late,' except when it came to the Election period when he lowered in order to help Sleepy Joe Biden, later Kamala, get elected," he wrote.

His Truth Social post developed one of Trump's longstanding beliefs about the Fed: that it should be more responsive to what the president wants. His statement and those of other advisers allege that the institution, far from being above Beltway politics, has already become politicized.

By Trump's account, Powell worked to help Biden during his term and is now unwilling to provide the same support to his own second-term agenda. He put no weight on the fact Trump appointed Powell to the role in 2018, that Powell worked closely with his administration in 2020 to provide unprecedented support when the pandemic hit, or that the Fed was prepared to saddle Biden with a recession in 2023 by raising interest rates sharply to bring inflation down.

Powell and his colleagues have said that the central bank doesn't take political considerations into account when setting policy. Powell has spent much of his seven years as chair trying to shore up the institution's apolitical DNA after bruising political attacks following the 2008 global financial crisis.