Fed Chair Jerome Powell Tariffs Worries: How His Concern Made Donald Trump Angry

Tensions between President Donald Trump and Federal Reserve Chairman Jerome Powell have reignited, with Trump publicly denouncing Powell over his cautionary stance on tariffs and interest rate policies. 

As markets reel from growing uncertainty and steep sell-offs, Trump’s latest attack has not only stirred political drama but also intensified financial anxiety across Wall Street. 

At the heart of the issue lies Powell’s concern about tariff-induced inflation—an issue Trump sees quite differently.

Trump's Social Media Salvo: “Loser” Powell Must Cut Rates “NOW”

On April 21, President Trump launched a new round of criticism against Fed Chair Jerome Powell via Truth Social, calling him a “major loser” and accusing him of being “too late” on rate cuts. 

Trump argued that inflation is virtually nonexistent, citing falling energy and food prices. He demanded immediate “preemptive cuts” to interest rates to prevent an economic slowdown.

“There can almost be no inflation,” Trump claimed, “but there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW.”

This post came just days after Powell’s warning that tariffs could fuel inflation and slow growth, a position that appears to have enraged the former president, especially as he eyes a second term in the White House.

Read also: Is Jerome Powell More Dovish? Looking at the Latest Speech from the Fed's Chair

Powell’s Tariff Concerns: A Flashpoint for Market Stability

Last week, Jerome Powell addressed the Economic Club of Chicago, where he reiterated the Fed’s cautious stance on interest rate policy. 

He noted that the central bank remains committed to keeping inflation under control and warned that Trump’s proposed tariffs could derail economic growth.

“Tariffs are likely to move us further away from our goals... probably for the balance of this year,” Powell stated.

He also emphasized the importance of “waiting for greater clarity” before adjusting interest rates, highlighting the Fed’s measured approach in an increasingly volatile economic environment.

Can Trump Fire Powell? Legal Hurdles and Market Reactions

Trump's allies are reportedly exploring whether the president can legally remove Powell before his term ends in May 2026. 

However, Powell has asserted that, under existing law, the president lacks authority to terminate a sitting Fed chair without just cause.

This looming constitutional and legal question has alarmed analysts and investors alike. Krishna Guha, Vice Chairman of Evercore ISI, told CNBC that such a move would rattle the markets and undermine the independence of the Federal Reserve.

“If you actually did try to remove the Federal Reserve chairman, I think you would see a severe reaction in markets,” Guha warned.

Such an action, he argued, would drive Treasury yields higher, weaken the U.S. dollar, and prompt a sharp sell-off in equities.

Read also: Jerome Powell Termination: Analyzing Its Impact on Crypto

Market Reaction: Stocks Slide, Dollar Dips, Bitcoin Surges

The fallout from Trump’s statements was immediate. On Monday morning, all major U.S. stock indexes opened lower. The Dow Jones Industrial Average fell more than 750 points within the first hour of trading, while the Nasdaq slid 2.6%. 

Meanwhile, the U.S. dollar hit its lowest level since 2022, amplifying concerns about monetary instability.

Amid this turmoil, Bitcoin surged past $88,000 before settling around $86,800. Analysts attributed the crypto’s rise to growing institutional demand and the weakening dollar, reinforcing its narrative as a hedge against centralized financial uncertainty.

“Bitcoin is once again flirting with the ‘decoupling’ narrative,” said Nic Puckrin of Coin Bureau. “A prolonged USD downtrend will only support the use case for Bitcoin as a store of value.”

Political and Economic Implications: A Brewing Storm

Trump’s rhetoric may galvanize his political base, but his aggressive tone toward Powell is raising alarms in financial and policymaking circles. 

By undermining the Fed’s independence and pushing for ultra-loose monetary policy, Trump risks destabilizing not only the economy but also his credibility with institutional investors.

The broader implications could be dire. As the U.S. navigates a complex landscape of global trade negotiations, inflationary pressures, and geopolitical instability, Trump’s feud with Powell could become a focal point of both political and market narratives.

Read also: The Fed is Still Not Dovish! Blames Tariff as Cause for Uncertainty

Conclusion: Tariffs, Tension, and Turmoil

The clash between Jerome Powell’s caution and Donald Trump’s urgency is more than a political skirmish—it’s a showdown over the future of U.S. economic policy. 

As Trump doubles down on calls for immediate rate cuts and downplays the inflationary risk of tariffs, Powell continues to urge patience and prudence.

In the coming months, this conflict may escalate further, shaping not only financial markets but also the broader political dialogue heading into the 2026 Fed chair transition. 

One thing is certain: the Fed Chair Jerome Powell tariffs debate isn’t going away anytime soon—and neither is Trump’s anger.

FAQ

1. What did Jerome Powell say about tariffs?

Powell warned that tariffs — particularly steep ones like those proposed by Donald Trump — could fuel inflation and hurt American consumers. He noted that higher import costs tend to raise overall prices, making it harder for the Fed to control inflation.

2. Why did Powell’s comments upset Donald Trump?

Trump viewed Powell’s remarks as undermining his economic platform. Since Trump has proposed 10% across-the-board tariffs and 60% tariffs on Chinese goods, Powell’s warning highlighted the risk these policies pose to inflation and monetary stability — a narrative Trump sees as politically damaging.

3. Are tariffs inflationary?

Yes, most economists agree that tariffs increase the cost of imported goods. This leads to higher prices for businesses and consumers, potentially stoking inflation and forcing the Federal Reserve to keep interest rates elevated.

4. Has the Fed typically commented on tariff policy?

While the Fed avoids commenting on specific political proposals, it does analyze economic impacts of trade policies. Powell’s remarks were in line with the Fed’s mandate to maintain price stability and full employment, especially as tariffs can affect both