Donald Trump’s feud with Fed chair Jerome Powell has ranged from rate-cut pressure and insults to a dropped investigation tied to Fed renovations.
WASHINGTON — Donald Trump’s bitter feud with Federal Reserve chair Jerome Powell is moving toward its closing phase, with Powell preparing to step down as chair and Trump’s nominee, Kevin Warsh, in line to replace him.
The clash has been about more than personal hostility. It has centered on how quickly the Fed should cut interest rates, how the central bank responds to inflation risks tied to Trump’s tariffs and whether monetary policy can remain insulated from political pressure.
Trump’s criticism has carried a striking reversal: he was the president who first chose Powell for the job. In November 2017, during his first term, Trump said the Fed needed “strong, sound and steady leadership” and described Powell as “strong,” “committed” and “smart.”
Years later, Trump turned sharply against him. Last July, he called Powell “a terrible Fed chair” and said he was surprised President Joe Biden had extended Powell’s tenure. Since returning to the White House, Trump has repeatedly attacked Powell for not lowering rates as fast as he wanted.
The Fed cut rates three times in 2025 but held off moving faster while it assessed the inflation effects of Trump’s trade tariffs. Each pause drew new criticism from Trump, who branded Powell “Too Late” and used terms including “numbskull,” “moron” and “a real dummy” in public remarks and social media posts.
The feud also spilled into a public dispute over renovation work at Federal Reserve buildings. During a visit to the project, Trump said the cost was about $3.1bn, above an estimate of $2.7bn. Powell, standing beside him, disputed the figure and said Trump had included a third building that had already been built. Asked what he would do if a project manager went over budget, Trump said, “Generally speaking, I’d fire him.”
The most serious turn came after federal prosecutors opened a criminal investigation tied to Powell’s Senate testimony about the Fed renovations. Trump said he did not know anything about the inquiry.
Powell, who had largely avoided responding publicly to Trump’s attacks, said in a video that the Justice Department action should be seen alongside the administration’s “threats and ongoing pressure.” He framed the issue as whether the Fed would continue setting rates based on evidence and economic conditions, or whether policy would be driven by political pressure or intimidation.
Republican Senator Thom Tillis said he would not support Warsh’s nomination while the investigation continued, calling it a serious threat to the Fed’s independence. The Justice Department later dropped the probe, and Tillis said he looked forward to supporting Warsh’s confirmation.
That leaves the next stage of the Fed leadership transition focused on Warsh’s path to confirmation — and on whether the tensions that defined the Trump-Powell era fade with Powell’s departure or follow the central bank into its next chapter.
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